Insurance Journal West 2019-10-07 by Insurance Journal

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October 7, 2019 • Vol. 97 No. 19

Contents

News & Markets

Idea Exchange

Special Report

InsureTech Connect: The Insurance Industry Needs to Understand What Business It’s In

Closer Look: Workers’ Comp Premiums Up 2.2% in First Half of 2019

When Words Collide: Research and Document the Interpretation – Part 2 of 3

Local Officials from Across U.S. Pressure McDonald’s on Workplace Harassment Policies

Overall Best Agency to Work For: Higginbotham

Reimagining Corporate Culture to Engage Employees

GOLD Best Agency to Work For – East: Ironside Insurance Group

How Emerging Risks for Medical Device Manufacturers Create Opportunities for Agents

10 10

Trump Signs Stopgap Funding for Government That Includes Flood Program

Surplus Lines Premium Grows in Response to Weak Results; Top 15 E&S Writers: Fitch

26 27

GOLD Best Agency to Work For – Midwest: The Bulow Group

4 | INSURANCE JOURNAL | OCTOBER 7, 2019

28 29

M&A Review: A Blistering Start to 2019 Closely Tracks 2018’s Record-Setting Numbers

Closing Quote: Is Your Website ADA Compliant?

GOLD Best Agency to Work For – South Central: Hotchkiss Insurance

GOLD Best Agency to Work For – West: Snapp & Associates

6 Opening Note

Blending Generations: Why Millennials, and the Industry, Must Bridge the Gap

GOLD Best Agency to Work For – Southeast: Acentria Insurance

Departments

12 Declarations

12 Figures

19 Business Moves

44 50

22 People

42 My New Markets

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Opening Note Write the Editor: awells@insurancejournal.com

Stealing Is Contagious

he restaurant industry, like many cash industries, is ripe for theft. One thing to take note of is just how contagious bad behaviors like stealing tend to be inside food establishments. New research by three researchers from Olin Business School at Washington University in St. Louis have completed a study of workplace theft among restaurant workers that details, for the first time, how stealing is contagious. New restaurant workers are particularly susceptible. While thieves tend to influence other workers to steal, the research team found that peers are strategic about when to use their sticky fingers: If Bob is stealing a lot today, they’ll say, we’d better not steal — or everyone will get caught. To reach their conclusions, researchers studied seven years’ worth of data from a restaurant point-of-sale equipment distributor, covering 1,049 locations from 34 different casual dining restaurant chains in 46 states. The database included more than 5.7 million transactions involving more than 83,000 servers. The researchers used the data to gauge whether misconduct among workers spreads to coworkers. Their paper, “The Influence of Peers in Worker Misconduct: Evidence from Restaurant Theft,“ is forthcoming in the journal Manufacturing & Service Operations Management. “Bad apples with high levels of misconduct are even more costly than their individual behavior,” the authors wrote, because those bad apples negatively influence their peers to commit similar bad acts. The problem is even bigger than the data shows, said Tat Chan, professor of marketing at Olin. Chan and his colleagues studied data looking at millions of restaurant transactions, but the algorithm it used took a conservative approach to flagging theft. One key finding: If new restaurant workers are exposed to stealing peers within the first five months of starting their job, they also are likely to become habitual thieves. “To make sure employees do not learn stealing from their peers, it’s important to influence them in the first few months,” Chan said. “If they don’t know what the typical conduct is, but they see their peers steal, they will follow.” Several schemes in the industry are notorious, including “the wagon wheel scam,” in which servers transfer an item from one customer’s bill to another who ordered the same thing. Once the first customer pays the original bill, the server reprints it without the item and pockets the difference. Other schemes involve “comping” or refunding a meal — or voiding a transaction entirely — after the customer has paid, but before the ticket is closed. The National Restaurant Association estimates that theft accounts for 4% of restaurant costs. The U.S. restaurant market is projected to earn about $863 billion this year. The team’s research found that fully 56% of servers in the database committed identifiable theft at least once. The good news: managerial oversight does reduce theft.

The team’s research found that fully 56% of servers in the database committed identifiable theft at least once.

Andrea Wells Editor-in-Chief

6 | INSURANCE JOURNAL | OCTOBER 7, 2019

Publisher Mark Wells | mwells@wellsmedia.com Chief Executive Officer Joshua Carlson | jcarlson@insurancejournal.com

ADMINISTRATION / CIRCULATION

Chief Financial Officer Mark Wooster | mwooster@wellsmedia.com Circulation Manager Elizabeth Duffy | eduffy@wellsmedia.com Staff Accountant Sarah Kersbergen | skersbergen@wellsmedia.com

EDITORIAL

Chief Content Officer Andrew Simpson | asimpson@insurancejournal.com Editor-in-Chief Andrea Wells | awells@insurancejournal.com East Editor Elizabeth Blosfield | eblosfield@insurancejournal.com Southeast Editor/MyNewMarkets Amy O’Connor | aoconnor@insurancejournal.com South Central Editor/Midwest Editor Stephanie K. Jones | sjones@insurancejournal.com West Editor Don Jergler | djergler@insurancejournal.com International Editor L.S. Howard | lhoward@insurancejournal.com Columnists & Contributors Contributors: Brian Ambrosia, JoJo Harris, Anthony Levy, Joseph Petrelli, Mark Robinson, Molly Strangstalien Columnists: Bill Wilson

SALES / MARKETING

Chief Marketing Officer Julie Tinney | jtinney@insurancejournal.com West Sales Dena Kaplan | dkaplan@insurancejournal.com Romeo Valdez rvaldez@insurancejournal.com South Central Sales Mindy Trammell | mtrammell@insurancejournal.com Southeast and East Sales (except for NY, PA, CT) Howard Simkin | hsimkin@insurancejournal.com Midwest Sales Lisa Whalen | (800) 897-9965 x180 East Sales (NY, PA and CT only) Dave Molchan | (800) 897-9965 x145 Sales & Marketing Coordinator Ashley Berg | aberg@insurancejournal.com Advertising Coordinator Erin Burns | eburns@insurancejournal.com Insurance Markets Manager Kristine Honey | khoney@insurancejournal.com Senior Strategist Pam Simpson | psimpson@insurancejournal.com Social Media Manager Ly Short | Lshort@insurancejournal.com Marketing Administrator Gayle Wells | gwells@insurancejournal.com Marketing Director Derence Walk | dwalk@insurancejournal.com

DESIGN / WEB / VIDEO

V.P. of Design Guy Boccia | gboccia@insurancejournal.com V.P. of Technology Chris Thompson | cthompson@insurancejournal.com Ad Ops Specialist Jeff Cardrant | jcardrant@insurancejournal.com Web Developer Terrance Woest | twoest@wellsmedia.com Web Developer Ryan Kleshinski | rkleshinski@wellsmedia.com New Media Producer Bobbie Dodge | bdodge@insurancejournal.com Videographer/Editor Ashley Waldrop | awaldrop@insurancejournal.com

ACADEMY OF INSURANCE

Director Patrick Wraight | pwraight@ijacademy.com Online Training Coordinator Nathan Granitz | ngranitz@ijacademy.com

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News & Markets InsureTech Connect: The Insurance Industry Needs to Understand What Business It’s In

By Jim Sams

eople who buy gasoline generally don’t care for the product or enjoy the experience of pumping gas: They just want to drive. Chris Colborn, chief experience officer for the Lippincott creative consulting firm, opened with that analogy during a keynote presentation at the InsureTech Connect conference. He said the insurance industry should be in its heyday with rising perils such as global warming and cyber risks, but the industry needs to understand what business it’s in. “No one wants a quarter-inch drill bit,” he said. “They want a quarter-inch hole.” Colborn said a French tire manufacturer recognized how to build demand for an experience as a means of selling a product in 1900 and launched the Michelin Guides to rate restaurants in the Paris area. There were only 3,000 motor cars in all of France at the time. He said the insurance industry needs to think in the same manner about what customers want when they purchase a policy. He said by its very nature, the product of insurance creates a disincentive to buy: From the customer’s point of view, it’s a no-win situation. Only the insurance carrier wins if no claim if filed. Technology holds the means for insurers to connect with customers and meet their needs, Colburn said. He noted how a

8 | INSURANCE JOURNAL | OCTOBER 7, 2019

U.K. homeowners insurer, Neos, markets itself as a smart home product provider: It doesn’t just promise to pay for repairs, it prevents damage by installing sensors to detect water leaks or fires. Similarly, there are life insurance products on the market that award policyholders “mindfulness points” if they take steps to protect their health. “The goal here is to align your interests very closely with your customers,” Colburn said. Glenn Shapiro, president of personal lines for Allstate Insurance, said his company is working toward that goal but insurers in general have a long way to go. Shapiro recalled that when he started in the industry in 1990, it took five to seven days to adjust an auto claim, and adjusters could complete no more than four or five in a day. Nearly three decades later, that hasn’t changed. “We really haven’t been disrupted,” he said. “We’ve been stationary relative to the industries that are around us.” Shapiro pointed to the banking industry, which has been able to reduce the number of teller positions by allowing customers to perform transactions themselves. Consumers are anxious to make their own account transfers, deposit checks and withdraw money using technology and don’t miss waiting at the teller’s counter. Insurers can also let their customers

do some of the work, Shapiro said. With current technology, customers can file claims by snapping photos on smart phones. Machine learning has taught computer programs how to recognize whether a car is a total loss. If it’s a damage claim, the same smart phone photos can be used to build an estimate. Shapiro said similar opportunities are available in the homeowners line. Anyone who has perused a real estate website knows detailed data is available. That’s the same kind of data underwriters use to assess risk and price policies. “The data is there to price every home in America without asking a single question,” Shapiro said. The Insuretech Conference drew 7,000 attendees to the MGM Grand Conference Center, organizers said. That provided opportunity for tech vendors to demonstrate how technology can help insurers cut costs and better serve customers. Among them was Salesforce, a provider of customer relations management software. After Shapiro spoke, the company announced the launch of an extension of its Financial Services Cloud designed for the insurance industry. Eran Agrios, a marketing executive with the company, demonstrated how the Salesforce platform can guide a policyholder who suffers a minor accident through the claim process on her smart phone. A chat bot handles the first few questions and confirms all the customer data needed. The same software directs the customer to take photos with her cell phone, which then generates an estimate. A similar system within the Salesforce Financial Services Cloud connects a carrier’s agency manager with an agent for a refresher on cyber insurance. Salesforce said in a press release that several carriers, including Pacific Life, Tokio Marine & Nichido Fire Insurance Co. and Amica Mutual Insurance Co., are using its Financial Services Cloud to interact with customers. Its insurance capabilities are available today and start at $150 per user per month, the company said. INSURANCEJOURNAL.COM

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News & Markets Local Officials from Across U.S. Pressure McDonald’s on Workplace Harassment Policies

cores of local government officials from 31 U.S. states pressured McDonald’s Corp.’s in late September to do a better job of protecting workers from groping, obscene comments and other forms of sexual harassment, adding their voices to an employee-led campaign that has seen walkouts at several stores. In a letter to CEO Steve Easterbrook, 115 mayors, commissioners, city councilors and school board members asked McDonald’s to meet with workers, hear their stories and together craft tougher policies to effectively stamp out harassment. The officials are part of an advocacy network called Local Progress. Members of the U.S. Congress have written similar

letters and employees have ratcheted up pressure on McDonald’s at a time that the chain and other fast food restaurants have struggled to

Trump Signs Stopgap Funding for Government That Includes Flood Program

resident Donald Trump has signed a continuing resolution that will avoid a federal government shutdown by funding the government at current levels until Nov. 21. The Republican-led Senate voted 82-15 in favor the temporary funding resolution late last month after the Democraticcontrolled House passed the same measure 301-123 earlier in the week. Without the stopgap measure, funding for the

government was on track to halt on Sept. 30. The extension gives lawmakers more time to come to agreement over various full-year appropriations bills. A section of the resolution extends the National Flood Insurance Program through Nov. 21 also. The NFIP’s authorization was scheduled to expire Sept. 30. In June Congress extended the NFIP until the end of this month as part of a disaster aid bill.

10 | INSURANCE JOURNAL | OCTOBER 7, 2019

find and retain enough staff. The letter said McDonald’s employees have filed more than 50 sexual harassment complaints with the U.S. Equal Employment Opportunity Commission. Reuters could not verify this because EEOC complaints are not public. When asked to comment on the letter, McDonald’s referred Reuters to its Aug. 28 statement announcing a new training program for safe workplaces, which has support from more than 2,000 franchisees. “Together with our franchisees, we have a responsibility to take action on this issue and are committed to promoting positive change,” said Chris Kempczinski, McDonald’s USA president. “These actions are one more step we are taking to raise awareness at all levels of McDonald’s that will transfer both inside and outside the workplace.” Workers and those organiz-

ing them are trying to pressure McDonald’s, the largest U.S. restaurant chain by sales, to boost wages and address violence and harassment problems at its roughly 14,000 U.S. locations, most of them independently owned. Last month, workers at a Los Angeles McDonald’s walked off the job to protest, saying retaliation for reporting sexual harassment is rampant and they have been excluded from policy discussions, according to organizers and news reports – one of several similar protest in the last year and a half. Last year, McDonald’s started working with RAINN, the largest anti-sexual violence organization in the country, to improve its policies. McDonald’s August announcement was for an even broader program focused on mitigating violence, harassment, bias and bullying, to start in October. 2019 Copyright Reuters INSURANCEJOURNAL.COM

Figures

$1.5 Billion The approximate amount in total dividends Ohio Bureau of Workers’ Compensation is awarding to employers this year. The BWC attributes the payouts to strong investment returns, fewer injury claims and agency cost savings. Around 177,000 checks will be mailed in seven batches over four weeks. It’s the fifth time since 2013 the bureau has returned $1 billion or more to employers.

5.1 % The percent decrease in workers’ compensation insurance loss costs in Oklahoma for 2020 that has been approved by Insurance Commissioner Glen Mulready and will go into effect on Jan. 1, 2020, for new and renewing policies.

Declarations ‘Safe and Sound’

“We had 10 minutes to wake up 102 residents, get them to the center of the building. … And all are safe and sound.” — David Flicek, the president and CEO of Avera McKennan Hospital and University Health Center in Sioux Falls, South Dakota, comments on actions taken by staff members shortly before one of three EF-2 tornadoes pummeled the hospital campus on late on Sept. 10. Of the 102 patients moved, 39 of them were children.

12 | INSURANCE JOURNAL | OCTOBER 7, 2019

Harvey Rerun

“I’ve seen water over rooftops. … I’ve seen vehicles stalled out. Man, it’s kind of like the Harvey deal all over again.” — Colby Croom, a volunteer, who ventured out with a boat to help rescue people in the Beaumont area when flooding from Tropical Storm Imelda left hundreds of people trapped in their homes and cars. Imelda, said to be the continental United States’ fifth wettest tropical cyclone, dropped more than 41 inches in some areas and drew comparisons to 2017’s Hurricane Harvey. Imelda made landfall on Sept. 17 near Freeport, Texas.

History of Violations

“It’s so preventable. It’s so unnecessary.” — Harry Adler, executive director of the Truck Safety Coalition, an advocacy group calling for stricter federal truck safety regulations, responds to findings that the company that employed a Ukrainian-born truck driver whose collision with motorcyclists in New Hampshire left seven dead has a history of violations including mechanical problems and drug-related infractions. The Associated Press reported that Massachusetts-based Westfield Transport has faced over 60 violations in the last 24 months.

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$33,700 The amount in disability benefits that 56-year-old Robert Marra of Crawford, N.Y., unlawfully obtained from the New York State Workers’ Compensation Fund, according to a press release from the Orange County Sheriff’s Office. An investigation revealed that Marra, who was deemed to be fully disabled, falsely reported the extent of his injuries to doctors and independent medical examiners, and since has participated in approximately 12 Spartan-style races. He has been charged with grand larceny in the third degree, a class D felony, and penalties for fraudulent practices, a class E felony.

All Claims Being Equal

“The law requires that all claims of the same priority be treated equally.” — PG&E in late August argued against a proposed reorganization plan for the bankrupt utility because the proposal would pay fire victims who lost their homes ahead of insurance companies and “unjustly enrich” some bondholders.

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$350,000 The amount two vaping companies have agreed to pay under a settlement with Los Angeles prosecutors for reportedly using marketing that promotes youth consumption of tobacco and selling vaping products online without proper age verification. NEwhere Inc. and VapeCo Distribution LLC also agreed not to promote their products to minors.

Drug Manufacturers’ Civic Liability

“Drug manufacturers cannot, as is alleged here, knowingly seek out suspect doctors and pharmacies, oversupply them with opioids for the purpose of diversion, benefit from the process, and then cynically invoke their status as otherwise lawful companies to avoid civil liability.” — The Tennessee Court of Appeals, ruling that a lawsuit against opioid makers can move forward. The court overturned a lower court’s dismissal of the case on the grounds that the Tennessee Drug Dealer Liability Act doesn’t apply to U.S. Food and Drug Administrationapproved drug manufacturers who are legally producing and distributing opioid medications.

OCTOBER 7, 2019 INSURANCE JOURNAL | 13

News & Markets Surplus Lines Premium Grows in Response to Weak Results; Top 15 E&S Writers: Fitch By L.S. Howard

irect written premiums in the U.S. excess and surplus (E&S) lines market during 2018 grew at its greatest rate since 2012, increasing 11% and representing the eighth consecutive year of premium growth, according to Fitch Ratings. The trend continued its upward trajectory in the first half of 2019 with premium growth of 15%, said Fitch in a report titled “U.S. Excess and Surplus Lines Market Review – Consecutive Weak Results Spurs Stronger Revenue Growth.” All major E&S lines of business contributed to the period to period growth, which nearly doubled the overall property/ casualty market’s growth rate for the year, the report added. At the same time, the E&S market significantly underperformed the broader P/C industry for the second consecutive year in 2018, reporting a 107% direct statutory combined ratio, compared with 116% in 2017, said Fitch, noting that large

insured catastrophe losses during the past two years were key drivers of this poor performance. The ratings agency pointed to Hurricanes Michael and Florence and the California wildfires in 2018 and Hurricanes Harvey, Irma and Maria during the previous year. The poor results seen by the E&S sector in 2017 and 2018 contrast with an average combined ratio of 92% during the prior five years (2012-2016), said Fitch. While the E&S market historically reports better underwriting performance than the admitted P/C market, its specialized nature and more attractive competitive dynamics, bring greater volatility, the report explained. “Underwhelming underwriting results have accelerated premium rate increases, particularly in the commercial property and auto segments,” said Doug Pawlowski, senior director, Insurance.

Above-Average E&S Growth Expected

Fitch predicted that further premium rate hardening and movement of under-

15 Largest E&S Direct Premiums Written 2018 DPW ($Mil.) Company IFS Ratings E&S Only All Lines % E&S 1. Lloyd's of London AA- 11,759 47,606 24.7 2. American International Group Inc A 3,566 14,815 24.1 3. Markel Corporation A+ 2,497 5,255 47.5 4. Berkshire Hathaway Inc. AA+ 2,246 43.708 5.1 A+ 1,841 5,931 31.0 5. W.R. Berkley Corporation 6. Nationwide Mutual Insurance Company NR 1,776 18,417 9.6 NR 1,572 6,061 25.9 7. Fairfax Financial Holdings 8. Chubb Limited AA 1,462 22,125 6.6 AA- 1,444 4,811 30.0 9. AXA 10. Liberty Mutual Insurance Company A- 1,264 34,605 3.7 A+/A 889 1,510 58.9 11. Alleghany Group 12. Zurich American Insurance Company NR 862 12,412 6.9 NR 822 7,337 11.2 13. Tokio Marine Holdings Inc 14. Argo Group US Inc NR 809 1,676 48.3 A+ 735 4,449 16.5 15. QBE North America Top 15 33,544 230,720 14.5

*Lloyd’s direct written premiums are gross of outward reinsurance and commissions on a calendar-year basis. Data excludes pools. IFS – Insurer Financial Strength. DPW – Direct Written Premium. N.A. – Not available. NR – Not Rated. Source: S&P Global Market Intelligence, Lloyd’s of London, Fitch Ratings. 14 | INSURANCE JOURNAL | OCTOBER 7, 2019

writing exposures toward non-admitted markets will support above average E&S market premium growth in the near term. “Reduced admitted insurer appetite for catastrophe-exposed property risks, and limits and capacity reduction in several liability segments, are driving further premium growth in 2019,” Fitch said, pointing to chronic losses in commercial auto that are pushing business to the E&S market.

M&A, Organic Growth

Efforts to improve profits by leading E&S market participants, including Lloyd’s and American International Group Inc., via changes in their policy limits and reduction in risk appetite are also significantly affecting underwriting conditions – and pushing premium rates up. (Lloyd’s and AIG are the top two E&S underwriters.) “The overall E&S market is anticipated to return to a slight direct underwriting profit in 2019, barring further large catastrophe losses, as pricing in commercial lines firm in nearly all segments, except for workers’ compensation,” said Fitch, adding that commercial property and automobile lines are experiencing the sharpest rate increases. M&A activity had less influence on E&S market share shifts during 2018 than during 2017, said Fitch. Transactions that included significant E&S business in 2018 and 2019 were AIG’s acquisition of Validus Holdings (July 2018) and Hartford Financial Services Group purchase of The Navigators Group in May 2019. Fitch said AIG was the only top-10 E&S writer to shrink its direct written premiums (DWP) during 2018, with a 6% decline. Although the company’s DWP have declined by 24% since 2014, the company has maintained its position as the largest E&S market outside of Lloyd’s. From an organic growth standpoint, Fitch said, Berkshire Hathaway Inc.’s expansion continues to stand out, reporting a market-leading five-year average direct premium growth of 31%. INSURANCEJOURNAL.COM

Closer Look: Workers' Compensation Workers’ Compensation Premiums Up 2.2% in First Half of 2019

n the aggregate, workers’ compensation insurers By Joseph L. Petrelli reported a modest increase in direct written premiums in the U.S. for the first six months of 2019 versus the same period 2018, up 2.2%. However, the 25 carriers with the largest dollar increase in their workers’ comp books of business grew their aggregate worker’s comp premium volume by 26.5%. This meant that the workers’ comp premium written by all others declined 0.7%. Aggregate dollar growth of workers’ comp from June 30, 2018, to June 30, 2019, was nearly $623,000,000. Based upon our review of second quarter 2019 data, as reported by insurers reporting to the National Association of Insurance Commissioners, workers’ comp direct written premiums have increased for nine consecutive years. Direct written premiums at midyear 2019 was nearly $28.5 billion, an all-time high. For comparison, the midyear amount for 2010 was $18.8 billion. However, the premium growth rate has consistently slowed over this period, from over 9% in 2011 over 2010 to a 0.4% increase in 2018 over 2017. With the top 25 workers’ comp insurers reporting a higher growth rate in direct written premium than all other insurers, and the insurers comprising the Top 25 being larger and better known national brands, one might assume that they

are executing rigorously vetted business models, and by doing so, taking profitable worker’s comp business from the rest of the industry. With the number of workers in the country at record highs, perhaps the Top 25 writers of workers’ comp are onto something that the rest of us are missing. Although experts will often attribute state by state differences in premium changes for workers’ comp or the corresponding loss and loss adjustment expense ratio to payroll levels, level of employment, rate of unemployment, revisions in loss cost levels or benefit levels, or other quantitative phenomenon, permit me to ask readers, including worker’s comp underwriters at the Top 25, one question: “What do Alabama, Idaho, Kansas, Mississippi, Nebraska, North Carolina, South Carolina, South Dakota, Tennessee, Wisconsin and Wyoming, 11 states located in widely different geographical areas of the country, have in common with one another?” According to DISA Global Solutions, www.disa.com, these 11 states are the last in the Union where marijuana is fully illegal. However, in the other

16 | INSURANCE JOURNAL | OCTOBER 7, 2019

39 states and the District of Columbia, the impact of growing, producing or harvesting marijuana (or prescribing or dispensing, etc.) may not necessitate a unique classification nor should those efforts be impacting existing classification codes. However, in the other 39 states and the District of Columbia, injured workers can, likely are, or would like to be, prescribed medical marijuana. Why would injured workers prefer medical marijuana? The Centre for Disease Control and Prevention (CDC) has published reports indicating that the sales related to opioid prescriptions have quadrupled since 1999. Concurrently, the CDC estimates that the number of deaths from opioids has similarly quadrupled since 1999. Workers read these same statistics and, with medical marijuana available in the overwhelming majority of states, might these workers request medical marijuana rather than opioids? If they do make such requests, or if their medical professionals prescribe medical marijuana, have the worker’s comp statutes kept up with the laws, customs and practices,

etc., of those who process and respond to workers’ comp claims? In many jurisdictions, medical marijuana has been adjudicated to be a permissible workers’ comp treatment and therefore a reimbursable expense. A review also indicated that the decisions to date favoring reimbursement for medical marijuana were directed at workers’ comp insurance companies, third party administrators of workers’ comp claims, and at least one self-insured employer. In other words, pretty much all providers of workers’ comp insurance. In the face of these rulings by the courts, and other cases that are in various stages of litigation, the applicable state laws may or may not permit the reimbursement of expenses associated with medical marijuana. In fact, some state laws bar such reimbursement. All writers of workers’ comp will need an answer to this dilemma. The 25 carriers with the largest dollar amount of growth in workers’ comp through June 30, 2019, might be envied by those insurers whose dollar volume declined; however, the emergence of medical marijuana in 39 states and the District of Columbia concurrent with the national scrutiny of opioids may be the phenomenon to evaluate and understand. Petrelli is the president and co-founder of Demotech Inc., a Columbus, Ohiobased financial analysis firm. Website: www.demotech.com.

continued on page 18 INSURANCEJOURNAL.COM

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Closer Look: Workers' Compensation continued from page 16

Industry Workersâ&#x20AC;&#x2122; Compensation Direct Premium Written (DPW) Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

DPW Through 6/30 $18,814,735,112 $20,618,828,533 $22,484,181,779 $24,324,470,907 $25,587,654,011 $26,871,226,504 $27,471,995,741 $27,750,183,279 $27,851,664,718 $28,474,143,475

Growth (Loss) ($942,841,444) $1,804,093,421 $1,865,353,246 $1,840,289,128 $1,263,183,104 $1,283,572,493 $600,769,237 $278,187,538 $101,481,439 $622,478,757

% Change -4.8% 9.6% 9.0% 8.2% 5.2% 5.0% 2.2% 1.0% 0.4% 2.2%

DPW Through 12/31 $36,269,774,642 $39,743,363,214 $43,755,244,979 $46,981,116,563 $49,245,124,906 $51,241,191,346 $52,253,269,883 $52,414,653,131 $55,727,832,353 --

Growth (Loss) ($796,025,133) $3,473,588,572 $4,011,881,765 $3,225,871,584 $2,264,008,343 $1,996,066,440 $1,012,078,537 $161,383,248 $3,313,179,222 --

% Change -2.1% 9.6% 10.1% 7.4% 4.8% 4.1% 2.0% 0.3% 6.3% --

Data Source: The National Association of Insurance Commissioners (NAIC), Kansas City, Mo., by permission. Information derived from an S&P Global Market Intelligence product. The NAIC and S&P Global Market Intelligence do not endorse any analysis or conclusion based upon the use of this data. This exhibit is based upon the initial reporting of second quarter 2019 data, estimated to be more than 95 percent of the companies that report quarterly. It excludes several large state funds (e.g. California, New York, Pennsylvania) which have not always reported second quarter data.

Top 25 Property/Casualty Companies

Based Upon Dollar Amount of Direct Premium Written (DPW) Growth (000s omitted) Rank Company Name Group Name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Everest Premier Insurance Company Tri-State Insurance Company of Minnesota ARI Insurance Company Accident Fund Insurance Company of America Benchmark Insurance Company Property and Casualty Insurance Company of Hartford Starr Specialty Insurance Company Ohio Security Insurance Company Accredited Surety and Casualty Company Inc. Sompo America Fire and Marine Insurance Company XL Specialty Insurance Company New Hampshire Insurance Company CopperPoint Indemnity Insurance Company Berkshire Hathaway Homestate Insurance Company Accident Fund General Insurance Company United Wisconsin Insurance Company Imperium Insurance Company Sirius America Insurance Company Clear Spring Property & Casualty Company Texas Mutual Insurance Company Sentinel Insurance Company Ltd. Travelers Casualty and Surety Company Charter Oak Fire Insurance Company St. Paul Protective Insurance Company Arch Insurance Company

Year to Date Year to Date 6/30/2019 6/30/2018

Everest Reinsurance Holdings Group $105,640 WR Berkley Corp Group $72,630 AmTrust Financial Serv Group $56,596 BCBS of MI Group $350,487 Benchmark Holding Grp $157,717 Hartford Fire & Casualty Group $206,078 Starr Group $35,365 Liberty Mutual Group $191,407 Randall & Quilter Investment Group $28,461 Sompo Group $32,318 AXA Insurance Group $119,516 American International Group $322,641 Copperpoint Group $37,190 Berkshire Hathaway Group $167,162 BCBS of MI Group $184,325 BCBS of MI Group $131,285 Houston International Ins. Group $42,711 China Minsheng Group $21,818 Group One Thousand One Group $24,542 N/A $565,141 Hartford Fire & Casualty Group $190,083 Travelers Group $147,931 Travelers Group $279,423 Travelers Group $18,241 Arch Insurance Group $260,259

Top 25 All others (651) Total

$1,135 $15,947 $0 $293,938 $119,392 $171,382 $957 $159,327 $322 $7,776 $95,098 $298,223 $12,792 $144,273 $161,604 $108,742 $21,052 $216 $3,041 $544,847 $170,834 $128,770 $260,897 $0 $242,029

$3,748,970 $2,962,595 $24,725,174 $24,889,070 $28,474,143 $27,851,665

Growth (Loss) $104,505 $56,683 $56,596 $56,549 $38,325 $34,697 $34,408 $32,080 $28,139 $24,542 $24,418 $24,418 $24,398 $22,888 $22,721 $22,543 $21,659 $21,602 $21,501 $20,294 $19,249 $19,161 $18,526 $18,241 $18,230

$786,375 ($163,897) $622,478

% Change 9,206.2% 355.4% N/A 19.2% 32.1% 20.2% 3,597.0% 20.1% 8,744.8% 315.6% 25.7% 8.2% 190.7% 15.9% 14.1% 20.7% 102.9% 9,998.2% 707.1% 3.7% 11.3% 14.9% 7.1% N/A 7.5%

26.5% -0.7% 2.2%

Data Source: The National Association of Insurance Commissioners (NAIC), Kansas City, Mo., by permission. Information derived from an S&P Global Market Intelligence product. The NAIC and S&P Global Market Intelligence do not endorse any analysis or conclusion based upon the use of this data. This exhibit is based upon the initial reporting of second quarter 2019 data, estimated to be more than 95 percent of the companies that report quarterly. These figures exclude premiums for several large state funds (e.g. California, New York, Pennsylvania) that have not always reported second quarter data.

18 | INSURANCE JOURNAL | OCTOBER 7, 2019

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News & Markets Update on Lawsuits Targeting Vaping; Litigation Expected to Grow By Brendan Pierson

everal deaths and potentially hundreds of illnesses tied to e-cigarettes, which allow users to inhale nicotine vapor, often flavored, without

smoking, have been reported by U.S. health agency. Lawsuits on behalf of young consumers have been filed against e-cigarette maker Juul Labs Inc. and others are expected amid increasing scrutiny. The following is a summary of how the

litigation is playing out across the United States: • Young adult Juul users and parents of teenage users have filed dozens of lawsuits over vaping-related injuries in courts around the country, including both individual lawsuits and class actions. The lawsuits target Juul, which markets a nicotine-vaping device and controls about 75% of the e-cigarette market. Some have also named Marlboro maker Altria Group Inc., which has a minority stake in Juul, as a defendant. • Most of the plaintiffs allege that users became addicted to Juul, but at least two lawsuits go further. A Connecticut man alleges in a lawsuit filed in California state court that he suffered a massive, debilitating stroke as a result of Juul use, while the parents of a teenage girl allege in a proposed class action in Florida federal court that their daughter has suffered seizures linked to the device. • One set of legal claims in the cases focuses on fraudulent marketing. In these claims, plaintiffs accuse Juul of claiming its e-cigarettes are meant to help adults stop smoking cigarettes, while marketing them to minors and young adults who have never used nicotine. They also say Juul has claimed its products are a safe alternative to cigarettes, when in fact they can deliver higher doses of nicotine. • Another set of claims focuses on product liability, alleging that Juul’s products are defectively designed because they are inherently dangerous, and that Juul failed to warn about the danger or both. • Juul said in a recent statement that its products are meant as a less dangerous alternative for adults who already smoke. “We have never marketed to youth and do not want any non-nicotine users to try our products,” the company said. • Altria has said that the conduct alleged in the lawsuits occurred before it

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News & Markets Washington Insurance Commissioner Orders Alaska Air Captive to Pay $2.5M

ashington Insurance Commissioner Mike Kreidler has hit another big corporation’s captive insurer with a fine. Kreidler has been going after captives for owed taxes by fining them since last year, when he issued large fines to captives for Microsoft and Costco. Kreidler has ordered ASA Assurance Inc., a captive insurer for Alaska Air Group, to pay more than $2.5 million in unpaid premium tax and penalties owed to Washington state for the unauthorized sale of insurance. ASA Assurance is a captive insurance company formed by Alaska Air Group for the purpose of insuring its risk in states including Washington. It issued four policies for Alaska Air Group and its subsidiaries, Alaska Airlines Inc., Horizon Air Industries Inc., and McGee Air Services Inc., collecting $91 million in premiums. ASA is not admitted to sell insurance in Washington state, according to Kreidler’soffice. State law requires

insurance companies to pay a 2% tax based on their written premiums. ASA reportedly paid no premium tax on the insurance it unlawfully sold. Washington state does not currently license captive insurers. Companies must buy insurance from either an admitted insurer or through a licensed surplus line broker and they must pay premium tax on the insurance they buy. Kreidler determined in 2018 that many large Washington companies are using captives to purchase their own insurance and failing to pay premium tax, and his office is working to identify all captives doing business in Washington. To date, nine captives have self-reported and two captives have paid $2.9 million in unpaid premium taxes and $1.4 million in fines,

tax penalties and interest. Kreidler reached a settlement of $876,820 with Cypress, a captive insurer for Microsoft Corp., in August 2018. Kreidler reached a settlement with NW Re Limited, a captive insurer for Costco Wholesale Corp., on March 8. It paid $3.6 million in premium taxes, tax penalties, interest and fines. ASA Assurance, domiciled in Honolulu, Hawaii, has demanded a hearing before an administrative law judge.

Group Behind California’s Data Privacy Law Wants Another One on the Ballot

he group behind California’s pending data privacy law is working to propose for the upcoming ballot a new law that would give consumers new data rights and place stricter obligations on companies. The group filed for an initiative with the Secretary of State to appear on the November 2020 ballot, called the California Privacy Enforcement Act. The need for a new act, which needs signatures from 620,000 registered voters to qualify, was explained by Alastair Mactaggart, board chair and founder of Californians for Consumer Privacy, in a release that went out to the media in late September. “In the two years since introducing the W4 | INSURANCE JOURNAL | OCTOBER 7, 2019

legislation that passed as the California Consumer Privacy Act (CCPA), which gives nearly 40 million people in this state the strongest data privacy rights in the country, I’ve realized the immense power consumers are up against when it comes to having true control over their own data,” the release states. Mactaggart notes that during the time between the passage of the CCPA and now, large companies have prioritized weakening the act, and new technological tools have emerged “that exploit a consumer’s data with potentially dangerous consequences.” The new law, according to the release, would: • Create new rights around the use and

sale of personal information. • Provide enhanced protection for violations of children’s privacy by tripling CCPA’s fines for illegal collection and sale of children’s private information and would require opt-in consent to collect data from consumers under age 16. • Require transparency around automated decision-making and profiling. • Establish a new authority to protect these rights, the California Privacy Protection Agency. • Fix election disclosure laws and require corporations to disclose how they use personal information to influence elections. • Require that future amendments be in furtherance of the law.

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News & Markets California Commissioner: Data Shows ‘Disturbing’ Disparities in Auto Insurance Discounts

he California Department of Insurance has released data from an investigation showing what the CDI is calling “wide socioeconomic disparities” in auto insurance group discounts offered to millions of California drivers. The CDI says the investigation illustrates that many affinity groups disproportionately and adversely affect drivers residing in ZIP codes with lower per capita incomes, lower levels of educational attainment, and larger communities of color. Some insurers offer lower automobile premium pricing to certain “affinity groups” including white-collar occupations and highly skilled workers, according to CDI data, which shows that one-quarter of Californians receive an affinity group premium reduction ranging from 1.5% to 25.9% depending on the insurer and group. California Insurance Commissioner Ricardo Lara called the new data “disturbing” after the first affinity group fact-finding hearing in the CDI’s history in late September in Los Angeles. “This disturbing data confirms what we have heard for years, that auto group discounts do not apply equally across California,” Lara said in a statement. “We are evaluating whether insurer affinity group discounts violate state

laws, and I am prepared to act to ensure all Californians have access to affordable auto insurance regardless of their income, education, or ethnicity.”

Affinity groups give millions of Californians access to more affordable auto insurance, according to a statement from Mark Sektnan, vice president for the American Property Casualty Insurance Association. “Over the last 30 years, a wide range of organizations have formed and benefited from affinity groups including labor unions, teachers, small business owners and their employees, fire fighters, and law enforcement, among hundreds of others,” the statement reads. “If affinity groups are restricted, millions of California drivers already in these programs could be forced to pay more for auto insurance. If changes are to be made, more affinity groups

should be created to encourage greater access.” Among the findings released by the CDI: • Customers in surveyed affinity groups tend to be in higher income ZIP codes. Only 26% of Californians in the lowest-earning areas ($22,516 per capita and below) receive group discounts, compared to 55% in the highest-earning areas ($49,070 per capita and above). • Those in affinity groups that were surveyed are more likely to reside in ZIP codes with a higher average educational attainment. Only 28% of those living in areas with the lowest number of college degrees receive discounts, compared to 56% for those where half or more have college degrees. • Those in affinity groups are more likely to reside in ZIP codes with a predominantly non-Hispanic white population. 47% of persons living in ZIP codes with a large non-Hispanic white population (62% or greater) receive an affinity group discount. Only 29% of those in heavily minority areas (greater than 83%) receive discounts. • Three-quarters of those in underserved communities were not in an affinity group, compared to 57% for the rest of the state.

Council Recommends $4B Plan to Safeguard Oregon from Wildfires

task force created by Oregon Gov. Kate Brown says climate change, overstocked forests and understaffed fire teams have placed Oregonians in extreme risk, necessitating a multi-billion-dollar program to safeguard the state from calamity. The council held its final meeting in late September and will submit recommendations to Brown in November. But a look at the council’s preliminary reports indicates they’ll seek billions for fuels treatment and W6 | INSURANCE JOURNAL | OCTOBER 7, 2019

ramping up firefighting capacity. The draft report proposes big investments including $40 million biennially for next-generation air tankers, helitack personnel and even a fire training center in southwest Oregon. Some worry the council is focusing too much on wildfire suppression and may invest in the wrong solutions. Brown said in a statement she knows different tools and additional resources are needed and not simply plays from last

News & Markets Exam Doesn’t Find Cause of California Dive Boat Fire By Stefanie Dazio

.S. investigators who examined the burned-out wreckage of a scuba diving boat have not been able to determine what ignited a fire that killed 34 people off the California coast, a law enforcement official in late September, but two inquiries are still searching for answers. Teams from the FBI and Bureau of Alcohol, Tobacco, Firearms and Explosives have left after spending two weeks reviewing what remains of the Conception, according to an official with knowledge of the investigation. Parts of the vessel have been sent to labs for additional testing, said the official, who was not authorized to release the information publicly and spoke on the condition of anonymity. Investigators are still working to determine the blaze’s cause and origin, though they are done looking at the boat itself, said Carlos Canino, special agent in charge of the ATF’s Los Angeles office. “We don’t put a time limit on it,” he said. “That all depends on the scene and the evidence.” The official said there is no indication anyone intentionally set the Sept. 2 fire.

The Coast Guard, FBI and U.S. attorney’s office in Los Angeles are leading a criminal probe, while spokesman Eric Weiss said the National Transportation Safety Board has an “active investigation” into the safety issues. The captain and four crew members were asleep on the upper deck and survived the pre-dawn fire, which trapped 33 passengers and a deckhand sleeping below deck during a three-day scuba diving excursion. Coast Guard rules require a roving night watch, and authorities were looking into possible criminal charges that would likely focus on an obscure federal law known as the seaman’s manslaughter statute. The law only requires showing

negligence or that the captain or crew committed misconduct or neglected their duties. The boat’s owner, Truth Aquatics Inc., has preemptively filed a federal lawsuit under a pre-Civil War maritime law that shields boat owners from monetary damages in a disaster at sea. Ryan Sims, a cook on the boat who broke his leg trying to escape the flames, claimed in a separate lawsuit that the boat was unseaworthy and operated in an unsafe manner. Coast Guard records show the Conception passed its two most recent inspections with no safety violations. Authorities will examine hundreds of documents seized from Truth Aquatics Inc. after they finished looking at the boat. Investigators wearing protective suits walked over planks to inspect and document the burned vessel propped up by braces and scaffolding at Port Hueneme, a naval base more than 60 miles northwest of Los Angeles, the official said. Some parts of the boat had washed away because it was submerged for two weeks off Santa Cruz Island, where the vessel was anchored the night of the tragedy. Copyright 2019 Associated Press. All rights reserved.

Lawsuit Says Colorado Railroad Ignited Fires Prior to Wildfire

federal lawsuit says nearly 50 fires in Colorado were ignited by a railroad company in the weeks leading up to a major wildfire. The Durango & Silverton Narrow Gauge Railroad caused the smaller fires along its tracks in the weeks leading up to the 416 Fire. The U.S. Forest Service has filed a lawsuit seeking $25 million for firefighting costs. The lawsuit says the company was responsible for starting the fire north of Durango that began June 1, 2018. W8 | INSURANCE JOURNAL | OCTOBER 7, 2019

Fire investigators and eyewitnesses say a cinder from a train smokestack ignited the blaze during an extreme drought in Southwest Colorado. Court records say train conductors reported four dozen fires along the tracks. The railroad denies its coal-fired, steam locomotives started the 416 Fire. Copyright 2019 Associated Press. All rights reserved. INSURANCEJOURNAL.COM

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News & Markets

Washington Dairy Bottling Plant Hit with $1.8M Fine for Safety Violations

Battle Ground, Wash., dairy bottling and distribution operation has been hit with a large fine for multiple violations after a worker’s hand was crushed in the bottling plant. The Department of Labor & Industries has fined Green Willow Trucking, also known as Andersen Plastics and Andersen Dairy, $1.8 million for 22 willful violations, 16 of which were also determined to be egregious.

It’s the second-largest safety and health fine L&I says it has ever issued. This inspection was initiated after a worker at the company’s bottling facility had her hand crushed in a plastic bottle-molding machine while she was trying to clear a jam. Employees at the company have reported serious injuries and amputations over several years. Many of those injuries triggered inspections, according to L&I.

In 2014, 2015 and 2018, L&I cited the company for willful and serious violations related to lockout/tagout and machine guarding hazards Twenty-two of the violations for this 2019 inspection are considered serious in nature and willful. The situation is so serious that 16 of the violations are also defined as egregious. L&I cited the company for one egregious willful violation for each employee exposed to the amputation/crushing hazards. Most of the violations were a result of the employer requiring or allowing workers to put their limbs or bodies inside machines while they are still operating. These are known as lockout/ tagout violations because companies are required to ensure machines are completely locked out from electrical and mechanical energy before employees reach or climb into them. Over the past six years, there have been at least 10 serious incidents including amputations, crushing injuries and broken bones. The continued failure to adopt known and required safe practices is why L&I deemed these violations egregious. Employers have 15 business days from the time they receive a citation to appeal. Penalty money paid as a result of a citation is placed in the workers’ compensation supplemental pension fund, helping injured workers and families of those who have died on the job.

College in Washington Fined $135K for Multiple Asbestos Violations

he Evergreen State College in Washington is facing more than $135,000 in fines for multiple violations related to asbestos and other safety issues around its Olympia campus. The Department of Labor & Industries has cited the college for 29 serious violations. The fines for each violation range from $600 to $5,400. There were also two general violations with no fines. L&I opened the inspection on March 20, 2019, after receiving a complaint. The college’s maintenance team had an employee W10 | INSURANCE JOURNAL | OCTOBER 7, 2019

enter a steam vault and remove damaged asbestos-containing pipe insulation without adequate protections. The college was cited for several serious violations for this and other asbestos-handling violations. L&I also cited Evergreen for lockout/ tagout violations and violations of confined space requirements. Lockout/ tagout violations means the college required employees to work on electrical or powered equipment while the machinery could still operate. L&I also found violations for lack of eye protection, not

meeting emergency eyewash requirements, and deficiencies in the college’s chemical hazard communication program. Since the inspection, Evergreen has made a number of changes. The college hired a certified asbestos abatement contractor, and it sent two workers to a certified building inspector training course. Employers have 15 business days from the time they receive a citation to appeal. Penalty money paid as a result of a citation is placed in the workers’ compensation supplemental pension fund. INSURANCEJOURNAL.COM

News & Markets

continued from page W2

acquired its financial stake in Juul. “Our minority stake in Juul provides no basis for liability against Altria,” it said in a statement. • More lawsuits are expected. Joseph VanZandt, a lawyer with the firm of Beasley Allen, said his firm has been hired by more than 200 clients for vaping-related claims, of whom at least eight have already filed lawsuits. “We fully expect that there will be hundreds

if not thousands of individual cases filed,” he told Reuters. • Lawsuits filed in federal court are likely to be consolidated in so-called multidistrict litigation before a federal judge. Juul has moved to consolidate the lawsuits in the Northern District of California, which includes San Francisco. • Separately, a motion has been filed in a Los Angeles state court to consolidate the California state court cases there.

• North Carolina Attorney General Josh Stein in May sued Juul and has asked a state court to limit the flavors of Juul e-cigarettes sold in North Carolina. • Other state attorneys general, along with the U.S. Federal Trade Commission, are investigating Juul’s marketing practices. (Reporting by Brendan Pierson in New York Editing by Lisa Shumaker) Copyright 2019 Reuters. All rights reserved.

2 Vaping Sellers Settle Suit in Los Angeles for $350K, Won’t Sell to Minors

wo vaping companies have agreed not to promote their products to minors under a settlement with Los Angeles prosecutors. The city attorney’s office announced a lawsuit settlement in late September with NEwhere Inc. and VapeCo Distribution LLC. The LA-based companies also will pay $350,000 in fines. W12 | INSURANCE JOURNAL | OCTOBER 7, 2019

LA accused the firms of using marketing that promotes youth consumption of tobacco and selling vaping products online without proper age verification. City Attorney Mike Feuer says members of his office posed as 15-year-olds and were able to buy nicotine products. Under the settlement, the companies can’t advertise on media platforms

directed to minors, sponsor music or sports events and their advertising can’t use “celebrities, influencers or models” under 30 or those who have large youth followings. Legal action continues against a third company, Kandypens. Copyright 2019 Associated Press. All rights reserved. INSURANCEJOURNAL.COM

Business Moves

East

Plymouth Rock Assurance, Rider Insurance Company

Plymouth Rock Assurance has agreed to expand its investment in the motorcycle insurance segment with the acquisition of Rider Insurance Company, subject to regulatory approvals. A New Jersey-based motorcycle insurance carrier with $21 million in annual premiums, Rider Insurance was founded by a motorcycle enthusiast and has been committed to protecting fellow riders for nearly 50 years, according to a Plymouth Rock press release. The acquisition creates an opportunity for Plymouth Rock to invest more deeply in the motorcycle insurance segment, while also allowing the company to market its auto and home insurance products to Rider customers, the release stated. The transaction is subject to approval by the New Jersey Department of Banking and Insurance.

Alera Group, Landmark Benefits

Alera Group, a national independent insurance agency based in Deerfield, Ill., has acquired Landmark Benefits Inc., effective July 1, 2019. Landmark, located in Windham, N.H., is an employee benefits broker providing insurance benefits, human resource consulting, compliance and wellness to clients throughout the U.S. All Landmark employees will continue operating out of the firm’s existing locations under the name Landmark Benefits, INSURANCEJOURNAL.COM

an Alera Group Company LLC.

Arthur J. Gallagher & Co., The Novick Group

Arthur J. Gallagher & Co. has acquired Rockville, Md.-based The Novick Group Inc. Founded in 1987, The Novick Group is a retail property and casualty broker focused on providing insurance products and services to nonprofits and association clients throughout the U.S. Areas of specialization include complex liability and event cancellation coverages. Lou Novick, Julia Van De Wille and their associates will continue to operate from their current location under the direction of Dan Tropp, head of Gallagher’s Mid-Atlantic retail property and casualty brokerage operations. Arthur J. Gallagher & Co., a global insurance brokerage, risk management and consulting services firm, is headquartered in Rolling Meadows, Ill. The company has operations in 35 countries and offers client service capabilities in more than 150 countries around the world through a network of correspondent brokers and consultants.

Risk Strategies, Gerard B. Tracy Associates

Risk Strategies, a privately held, national insurance brokerage and risk management firm, has added to its employee benefits practice with the acquisition of Gerard B. Tracy Associates Inc. Based in Fairfield, Conn., Gerard B. Tracy Associates Inc. was founded in 1948 and has a decades-long history of creating employee benefits programs for a

variety of public and private entities with a specialty focus on institutions of higher education. In addition to developing benefit programs for higher education and other types of educational institutions, Gerard B. Tracy Associate’s clients include a number of general and nonprofit organizations, largely located throughout the Northeast. In recent years, Risk Strategies has built up its employee benefits practice groups. Acquisitions made by the firm have brought on board experts from independent specialty agencies and brokerages focused exclusively on employee health and welfare program challenges, as well as firms specializing in alternative financing, including self-funding, and the formation and management of captives. The company has further expanded its benefits reach with the acquisition of service businesses, including an actuarial firm and a healthcare claims auditing organization.

Midwest

Reliance Global Group, Altruis Benefit Consulting

Reliance Global Group Inc. has completed its acquisition of Bingham Farms, Michigan-based Altruis Benefit Consulting. The acquisition follows a letter of intent between the parties as previously announced on May 8, 2019. Altruis serves customers throughout Michigan, specializing in providing individual and group health insurance. Altruis generated revenue of approximately $2.5 million in 2018. The transaction was completed through a combination of $1.4 million of cash, provided by Reliance Global Holdings LLC, a company controlled by Ezra Beyman, CEO of RELI, as well as $4.1 million debt from an unaffiliated lender, and the issuance of approximately 11.9 million shares of restricted stock. Reliance Global also announced it has completed its acquisition of Fortman Insurance Agency LLC in Ohio, a provider of personal and commercial insurance lines, as well as Southwestern Montana Insurance. Fortman and Southwestern

continued on page 20 OCTOBER 7, 2019 INSURANCE JOURNAL | 19

Business Moves continued from page 19 Montana Insurance together generated $3.1 million of revenue in 2018, Reliance Global said.

High Street Insurance Partners, Ottawa Kent Insurance Agency

High Street Insurance Partners, an ExecFactor full-service insurance brokerage platform owned by private equity firm Huron Capital, has acquired Ottawa Kent Insurance Agency, an outsourced risk management and independent insurance agency with four offices in West Michigan. Ottawa Kent has operated for more than 40 years in West Michigan, providing insurance products and services to more than 10,000 customers, with offices in Jenison, Sparta, Holland and Byron Center. High Street plans for all Ottawa Kent principals to remain active members of the business and retain their current positions, which is expected to help ensure that existing customers continue to receive expected and expanded services.

South Central

AssuredPartners, Houston Business Insurance Agency

Florida-based AssuredPartners Inc. has acquired Houston Business Insurance Agency located in Houston, Texas. The acquired agency’s team of five will remain under the operational leadership of Dominique Renaud. Providing property/casualty insurance for businesses of all sizes, Houston Business Insurance Agency has estimated revenues of $1 million annually. Headquartered in Lake Mary, Florida, AssuredPartners is led by Jim Henderson and Tom Riley.

Arthur J. Gallagher, Serna Insurance Agency

Arthur J. Gallagher & Co. has acquired Serna Insurance Agency, based in Humble, Texas. Founded in 2001 by Pete and Martha Serna, Serna Insurance Agency offers private client, personal lines and commercial insurance products and services to clients throughout Texas and in surrounding 20 | INSURANCE JOURNAL | OCTOBER 7, 2019

states. Pete, Martha and their associates will continue to operate from their current location under the direction of Jeff Saunders, head of Gallagher’s U.S. personal lines operations. Arthur J. Gallagher & Co., a global insurance brokerage, risk management and consulting services firm, is headquartered in Rolling Meadows, Illinois.

Southeast

Hub International, Phil Bailey & Associates

Hub International Limited has acquired the assets of Phil Bailey & Associates, P.A. Located in Oxford, Miss., Phil Bailey & Associatesis an employee benefits brokerage firm, providing clients with employee benefit products and consulting services. Phil Bailey, owner of Phil Bailey & Associates, and team will join Hub Gulf South in Hub’s Oxford office. The brokerage was established in 1970. Hub International Limited is committed to growing organically and through acquisitions to expand its geographic footprint and strengthen industry and product expertise.

West

Hub International, Inter-Mountain Retirement Partners

HUB International Ltd. has acquired the assets of Denver, Colo.-based InterMountain Retirement Partners Inc. Chad J. Larsen, president and CEO of Inter-Mountain, will join Hub Colorado. Inter-Mountain has a second office in Salt Lake City, Utah, and provides investment and retirement plan consulting services to corporations, governmental and nonprofit organizations, as well as serving individual investment clients throughout the region and nationally.

C3 Risk & Insurance Services, Mission West

C3 Risk & Insurance Services has acquired Mission West Insurance, an Orange County, Calif.-based insurance brokerage. Mission West is an independent agency offering business, personal and

employee benefits insurance services. C3 is a California-based, privately-owned insurance brokerage.

CopperPoint, Alaska National Insurance Company

CopperPoint Insurance Cos. has agreed to acquire Alaska National Corp. and its wholly owned subsidiary, Alaska National Insurance Co., an Alaska-domiciled workers’ compensation and commercial insurance carrier. The transaction is expected to close once customary regulatory reviews and approvals are received. CopperPoint’s headquarters will remain in Phoenix, Ariz., while Alaska National will continue operating under its company name and will remain domiciled in Anchorage, Alaska. The combined companies will have a locally-focused footprint with 10 offices in Anchorage, Boise, Denver, Irvine, Las Vegas, Phoenix, Portland, Seattle, Walnut Creek and Westlake Village. This enables and reinforces the companies’ shared essential philosophy of getting close to their distribution partners and their policyholder customers. CopperPoint, a provider of workers’ comp and commercial insurance, privatized from the state of Arizona and converted to a mutual insurance company in 2013. In 2017, the company acquired Pacific Compensation Insurance Co., expanding into the California market. In 2018, CopperPoint began to offer products under the CopperPoint brand in Colorado, Nevada, New Mexico and Utah. In 2019, CopperPoint adopted a new mutual insurance holding company corporate structure. Alaska National Insurance Co. is a commercial insurance provider licensed in 26 states. The company focuses on workers’ comp, commercial property and auto, general liability, inland marine, umbrella, crime and other commercial insurance services. As of mid-year, the company has a reported statutory surplus of roughly $550 million. In 2018, the company had gross written premium of $250 million and the combined companies will represent roughly $650 million in premium and an asset base of nearly $4.8 billion. INSURANCEJOURNAL.COM

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Credit and political risk insurance brokerage specialist BPL Global has appointed Donnie DiCarlo as executive vice president. He will be based in New York and is charged with expanding BPL’s client base in the U.S. and the wider Americas region. DiCarlo joins BPL after 10 years as senior vice president of Marsh’s Credit Specialties Group. He led Marsh’s Political Risk and Structured Credit Team in Latin America before leading the broker’s Lender’s Solutions Group in the Americas. Prior to working at Marsh, DiCarlo was with Willis. Specialist insurer Beazley has hired Cal Spessard to head the team responsible for handling claims arising from the company’s environmental liability business. Spessard joins Beazley from environmental risk management specialists WCD Group, where he served as director of claims and litigation services. Prior to joining WCD in 2016, he held a series of senior claims roles at AIG for 12 years. At Beazley, he succeeds Larry Griffin, who has been promoted to head the claims team responsible for Beazley’s professions business, which, in addition to environmental liability, includes professional liability for architects and engineers and for lawyers. Spessard will be based in Beazley’s New York office.

East

Workers’ compensation specialist

The MEMIC Ted Lieberman Group has appointed Ted Lieberman to the role of

production underwriter to support continued growth in the Pennsylvania and New Jersey markets. Prior to joining MEMIC, Lieberman worked in underwriting at Zurich North America in Philadelphia and on the agency side at Hugh Wood Inc. and Insurance Office of America.

AXA XL has promoted Marc Bertha as team lead for the U.S.

Eastern Region Multinational Casualty group. Based in New York, Bertha will be leading the region’s underwriting team. Bertha joined AXA XL in 2013 as a senior manager of Global Programs and Network Services. He previously worked at Zurich, North America. Kaufman Dolowich & Voluck LLP (KDV), a national law firm headquartered in Woodbury, N.Y., has hired Peter A. Stroili as an insurance coverage partner in its Peter Stroili New York City office. Stroili has 30 years of experience in insurance coverage, professional liability and directors and officers (D&O) insurance matters. Prior to joining KDV, Stroili was a partner at D’Amato & Lynch in New York. Last year, KDV’s New York City office added three D&O partners from D’Amato & Lynch, including Mary Jo Barry, KDV’s co-managing partner of the New York office. Stroili’s practice includes handling complex civil litigation, including arbitrating and litigating insurance coverage matters geared to specific transactions, professional liability defense, reinsurance and securities litigation.

22 | INSURANCE JOURNAL | OCTOBER 7, 2019

Southeast

Universal Insurance Holdings Inc.’s Chairman and CEO Sean P. Downes has taken on a new role as executive chairman, beginning July 15. The Universal Sean Downes Insurance Holdings Board has appointed current Chief Operating Officer Stephen J. Donaghy as the new CEO. Downes has been an executive with the company for the last 20 years and served as Stephen Donaghy chairman and CEO for the past six years. Donaghy has been a member of the Universal management team for the past 13 years. He has been the company’s chief operating officer since March 2016. He served as the chief marketing officer from January 2015 to March 2016, as chief administrative officer from February 2013 to June 2015, as chief information officer from 2009 to February 2015 and as executive vice president since 2006. Before joining Universal, Donaghy held various executive positions at JM Family Enterprises, a privately held company, including vice president of Strategic Initiatives, vice president of Sales and Marketing and senior information officer. Universal Insurance Holdings Inc. is a holding company offering property and casualty insurance and value-added insurance services headquartered in Fort Lauderdale, Fla.

FCCI Insurance Group has promoted Kimberly Burnside to regional vice president to lead the Southeast region. She will be based out Kimberly Burnside of Atlanta. Burnside has been with FCCI for nearly three years. She began as the managing director of the Southeast region, where she led the regional underwriting team. Prior to that, she was with Liberty Mutual Insurance, where she served as the senior underwriting manager for five years. She has also held two other managerial positions with Harleysville Insurance and AIG. FCCI Insurance Group is a super-regional mutual insurance company providing business insurance coverage, services and surety exclusively through independent agents. The company is headquartered in Sarasota, Fla.

South Central

Midlands Management Corp. has appointed

Jennie Reed to the

expanded role of Jennie Reed Brokerage and Binding Unit team leader in Dallas. With more than 20 years in the industry, Reed began her career as a commercial account manager at an independent insurance agency. Reed has played a role in expanding and developing Midlands’ brokerage offerings and market share. She will be tasked with streamlining operations, improving the agent and broker INSURANCEJOURNAL.COM

experience and improving business strategies. Archie Gall has been named CEO of Tricolor Insurance, an affiliate company of Dallas-based Tricolor, a used vehicle retailer focused on the Hispanic consumer market. With 30 years of experience in the insurance industry, Gall has a track record of launching, growing and operating insurance agencies in Texas. Between 2005 and 2014, Gall grew his Austin-based operation to more than 20 locations before it was acquired by Confie Seguros, a national non-standard auto insurance giant serving the Hispanic market. Tricolor Insurance Agency, an affiliate of Tricolor Auto Group, currently serves as an agent for 10 nonstandard carriers and markets its services throughout Tricolor’s 28 dealerships and through its eight Ganas dealerships in southern California. Currently available only to Tricolor auto purchase customers, the company plans to extend its insurance offering to all vehicle owners later next year.

Midwest

Managing general agency and surplus lines broker J.M. Wilson has promoted

previously holding positions including accounting and finance associate, agency coordinator assistant and human resources assistant. J.M. Wilson also promoted Alex Mikos to transportation underwriter in its Arlington Heights, Illinois, office. Mikos is responsible for underwriting new and renewal transportation risks and serving independent insurance agents in Illinois, Iowa and Nebraska. He has been with J.M. Wilson for a year and has seven prior years of experience in the mortgage industry. Before his promotion, Mikos was an assistant transportation underwriter. St. Louis-based POWERS Insurance & Risk Management has hired

Rachel Winkelmann

as its newest commercial lines account Rachel Winkelmann manager. In this position, Winkelmann will be responsible for the ongoing management of commercial clients, retaining new and renewal clients, and assisting the company’s producers in order to enhance business development. Prior to joining POWERS, she utilized her investigation and management skills as a claims professional at a local insurance company.

Dawn Van Niman

Dawn Van Niman to accounting and

finance specialist in the company’s Portage, Michigan, office. She is responsible for processing accounts payable and receivable, performing audits and managing agent accounts. Van Niman has been with J.M. Wilson for 12 years,

INSURANCEJOURNAL.COM

Carmel, Indiana-based

Protective Insurance Corp.,

a specialty property and casualty holding company in the transportation and workers’ compensation insurance industries, has appointed John Barnett as its chief financial officer, effective Sept. 30, 2019, and Bahr Omidfar as chief

information officer, effective Sept. 16, 2019. Barnett most recently served as chief financial officer and executive vice president of First Acceptance Corp., a non-standard auto insurance underwriter, having previously served as senior vice president in its Finance division. Barnett also has served as vice president of Finance at Broadcast Music Inc., as well as in various other management and manufacturing roles during his career, including as senior manager of planning and analysis at Anheuser-Busch Cos. Omidfar most recently served as chief technology officer at CNA Insurance. Bahr also served in various senior vice president roles with Fidelity Investments, focusing on technology and security. Previously, he held roles at Rockwell Automation, Raytheon, Motorola, Deloitte and Northrup Grumman Corp.

West

Irvine Calif.-based Western

Growers Insurance Services Inc.

Phoenix, Ariz.-based

CopperPoint Insurance Cos. has named

Barb Fuchs

has named

Jodi Martin

the wholly-owned insurance brokerage of Western Growers and offers risk mitigation and management solutions to agricultural and related industry members in California, Arizona, Colorado and New Mexico. Renton, Wash.-based Bell-Anderson Agency Inc. has named Kathie Watson as chief operating officer. Watson has been Kathie Watson the firm’s commercial lines manager since 2014. Her duties have included oversight of the agency’s administrative functions including claims, information technology and compliance. She was previously a customer service manager with Cochrane & Co. Bell-Anderson has six offices across Washington.

director of Jodi Martin employee benefits account management. Martin will lead account management activities while also supporting the growth and retention of WGIS’ customer base. Martin has more than 30 years of experience in the insurance industry specializing in agriculture. She was previously senior vice president at United Agricultural Benefit Trust. Martin also served as director of benefits services for a regional brokerage. Western Growers Insurance Services is

senior vice president of data management. Barbara Fuchs Fuchs will serve as the business lead for CopperPoint’s enterprise data warehouse program. She was most recently vice president of information management and analytics at Travelers. Fuchs was chief information officer in the international division of Travelers before that. CopperPoint is a provider of workers’ comp and commercial insurance with a footprint in Arizona, California, Colorado, New Mexico, Nevada and Utah.

OCTOBER 7, 2019 INSURANCE JOURNAL | 23

NATIONAL | Special Report | Best Agency to Work For

2019 Winners OVERALL

Higginbotham, Fort Worth, Texas

EAST

Gold: Ironside Insurance Group, Boston, Mass. Silver: Covenant Insurance Group, York, Penn. Bronze: Chalmers Insurance Group, Bridgton, Maine

MIDWEST

Gold: The Bulow Group, Tinley Park, Ill. Silver: Military United Insurance, Columbia, Mo. Bronze: DSP Insurance Services, Schaumburg, Ill.

SOUTH CENTRAL

Gold: Hotchkiss Insurance, Dallas, Texas Silver: BKCW, Killeen, Texas Bronze: The Nitsche Group, Giddings, Texas

SOUTHEAST

Gold: Acentria Insurance, Destin, Fla. Silver: Century Risk Advisors, Boca Raton, Fla. Bronze: BKS-Partners, Tampa, Fla.

WEST

Gold: Snapp & Associates Insurance Services, San Diego, Calif. Silver: Morris & Garritano, San Luis Obispo, Calif. Bronze: EPG Insurance Agency, Scottsdale, Ariz.

Is your agency on this list? Tell everyone! For reprints, badges, plaques and more, call (800) 897-9965 x125 or email us at: reprints@ insurancejournal.com

he votes were tallied and the results are in for the 2019 Best Independent Insurance Agency to Work For survey by Insurance Journal. Employees of the Best Agencies to Work For in 2019 highlight the importance of competitive salaries, employee benefits, training and education, resources, and other employee perks as drivers of satisfaction in the workplace. But it’s not all about compensation and benefits. Happiness in the workplace has a lot to do with people, relationships and culture. Employees of the winning agencies cite high personal job satisfaction; rate their relationships with their immediate boss or supervisor as positive; and express a high opinion of their agency’s owner or principals and their agency’s reputation in the community.

24 | INSURANCE JOURNAL | OCTOBER 7, 2019

Many employees are grateful the best agency owners support local charities and the community. Employees appreciate the opportunities their agencies provide for them to participate in community service. Employees take pride in working for agencies that are respected and hold strong values and ethics. Employees also appreciate the generosity of their agency owners in sharing revenues in the form of bonuses and trips. The best agencies also provide ways to help their employees grow — by giving them the tools and technology they need, and supporting them with education, training, annual and performance reviews and, in some cases, mentors. The survey results clearly show employees value this support.

As expected, the winning agencies score high for overall employee benefits including wellness programs and for working conditions including flex-time and alternative schedules that allow employees to work from home. The best agencies to work for also provide employees with a strong sense of work-life balance, and deliver a workplace environment where employees feel supported wholeheartedly by management and their peers. Many of the employees say they feel like family in their agencies. Insurance Journal wishes to thank the nearly 2,000 CSRs, account executives, producers, managers and other agency staff who took the time to nominate their independent insurance agency in this year’s survey. INSURANCEJOURNAL.COM

NATIONAL | Special Report | Best Agency to Work For

Overall

Higginbotham Fort Worth, Texas

Higginbotham: ‘Practice What You Preach’ By Andrea Wells

he story began in 1948 when Paul C. Higginbotham returned from military service to open a small personal lines focused insurance agency. More than 70 years later, Higginbotham has grown to become one of the nation’s largest independent agencies, ranking as No. 15 on Insurance Journal’s Top 100. Rusty Reid, Higginbotham’s chairman, president and CEO, believes the strength of the firm has always been its employees. Reid began at Higginbotham in 1986 as the firm’s 12th employee. He was named CEO at age 27, where he implemented the agency’s employee ownership model. “It all starts with our employees,” Reid told Insurance Journal. “Our mission statement is to exceed expectations of our employees. Our vision statement is to be the best place for employees to work. And our value statement is to be a family to our employees.” This employee-focused and family culture has not gone unnoticed even in an

Rusty Reid, CEO organization that operates with more than 1,000 employees. “It is a community within a community,” wrote one employee in Insurance Journal’s anonymous survey. “Employees are taught to treat each client’s file as if it was their own. Outstanding work is shown appreciation in the weekly production report. Benevolent group where employees embrace and support worthy charities.” Another survey respondent said: “Higginbotham is simply good. We have good people, with good hearts and good morals.” For Reid, acknowledge-

The annual Higg Hustle 5k race during Higginbotham’s two-day producer conference. INSURANCEJOURNAL.COM

ment that Higginbotham employees value the firm’s culture validates what he set out to do years ago. “It’s not just words; we are practicing what we preach,” he said. Losing that culture as the firm grows and acquires new firms is what worries Reid the most. But employees continue to feel valued even as the organization has exploded in size. One wrote: “I began working at Higginbotham in 1995. I was employee #30. Today, with 1,100 employees, it still feels like a 30-person agency.” Employees have a say in just about every aspect of the company, Reid said. “We’ve always been an employee owned company where the majority of the company is not only owned by the employees, but employees actually control the company as well.” That includes giving back to the communities they serve. In 2011, the firm launched its Higginbotham Community Fund that’s given almost $1.8 million to local charities. Any employee who gives to the fund has the right to request a donation to a charity of their choice, Reid said. Higginbotham hasn’t lost sight of its culture even when acquiring new firms. In 2018, in addition to growing organically, Higginbotham acquired five independent agencies and two practice groups. But any new acquisition must first pass the “Thanksgiving test” to make

sure the culture fits, Reid said. “My partner Jim Hubbard described many years ago what you call the Thanksgiving test … if you can’t have Thanksgiving dinner with someone, why would you want them as a partner?” Reid said. That means looking at the culture first. “We want to see some commonality as it relates to values. How do they think about their employees? Do they put their clients first? Employee turnover? … Those are the type of conversations we have so we don’t put our culture at risk.” Reid’s advice to other agency owners – remember that the insurance business is a service business. “If you want to have a good culture you need to look at how to make sure you are providing a great work environment and reward your employees,” he said. “If the firm does great it shouldn’t be just Wall Street that gets to celebrate – it should also be the employees because without them there is no firm.” Reid encourages the industry to remember that insurance is about the people – employees and clients. “It’s almost as if some have lost sight of what the actual business is,” he said. “This business is designed to help others … it’s not just a financial transaction.” It’s the people that makes the industry tick, he says. “Remember that.”

OCTOBER 7, 2019 INSURANCE JOURNAL | 25

NATIONAL | Special Report | Best Agency to Work For

East

Ironside Insurance Group Boston, Mass.

Embracing Change is Key to Success By Elizabeth Blosfield

ounded in 2012 in downtown Boston’s financial district, Ironside Insurance Group has been on the scene as an independent agency for just seven years, but it has seen consistent growth by embracing change and taking a modern approach to its business model, Agency Partners Ryan Kent and Joshua Shotts said. “With many agency owners retiring, we saw an opportunity for young agency owners to enter the business,” Kent said. Kent and Shotts started selling insurance at a direct writer in 2009 and quickly noticed an opportunity within the changing workforce, as many agency owners were retiring and industry consolidation continued. They chose to branch off on their own in 2012, and Ironside Insurance Group was born. The Boston, Mass.headquartered agency was nominated by its employees this year and won Insurance Journal’s East region Best

Agency to Work For - Gold award. The award was issued based on employees’ responses to an anonymous survey. Employees cited the working environment, the potential for growth and open lines of communication as just a few reasons why they believe Ironside Insurance Group is the best agency to work for. “The leaders of this organization are knowledgeable and committed to the growth of their business,” one employee wrote in the survey. “This forward-thinking trickles down to their employees, who are just as committed to the growth and success of the company." Another employee added one thing that stands out about Ironside is "how they welcome the ‘new’ way of insurance” through things like a paperless office and remote employees. Kent said the agency tries to leverage and take advantage of the changing landscape of work as much as possible through initiatives like automatic bill paying or allowing employees

Ryan Kent

Joshua Shotts

26 | INSURANCE JOURNAL | OCTOBER 7, 2019

to work remotely. “We feel many agencies are slow to adapt to the changing business and insurance environment,” he said. In addition to remote work options, the agency also offers half-day “summer Fridays” and flexible time off for employees, as well as encouraging opportunities for employees to attend industry education courses and gain professional designations. Shotts said the biggest factor in agency employees’ satisfaction, however, is giving them the autonomy to make decisions and feel empowered, an approach Ironside's employees praised in their responses. “Everyone feels like they play an active role in the company, and it really feels like a team,” one employee wrote. Other employees added that Ironside offers a supportive and encouraging work environment, and while the agency has seen rapid growth over the years, it always recognizes employee accomplishments and contributions along the way. “We are all proud to work for such a great team,” another employee wrote. Empowering their employees and encouraging feedback is something Kent and Shotts say they have worked hard to prioritize as they seek to continue to grow organically

and through acquisitions, they stated. “We feel in order to do this, we must maintain our core values and continue to develop our biggest assets - our employees,” Kent said. “The staff members are there every day on the front lines, monitoring the pulse of the agency and constantly interacting with your policyholders. They provide your best insight into what’s working and where there is room for improvement.” This approach appears to be working, as Shotts stated the agency has added employees to every department and has grown its overall book of business by a large margin in the past year, while also expanding the number of carriers and products it can offer to its clients. “Being able to grow our business while maintaining employee and customer satisfaction has been something we have taken pride in,” he said. Over the past seven years, what stands out as the best part of starting their own independent agency? “The best part of our job is that no two days are the same,” Kent said. “Insurance is always changing, and every day, we learn new things as business owners and insurance agents. We feel the last seven years are just the start.” INSURANCEJOURNAL.COM

NATIONAL | Special Report | Best Agency to Work For

Midwest

The Bulow Group Tinley Park, Ill.

A Different Direction By Stephanie K. Jones

he Bulow Group (TBG) in Tinley Park, Illinois, has a motto: “When other agencies are all going in the same direction, we choose to go in a different direction.” To Mike Bulow, who with his brother, Tom Bulow, owns TBG, the saying represents one of the guiding principles by which the agency operates. That is, “we block out distractions and what other agencies are doing. We stick to our game plan and growth plan,” he said. The agency’s 13 employees clearly appreciate the game plan and the direction in which they’re headed. They nominated and through their responses to Insurance Journal’s “Best Agencies” survey, elevated The Bulow Group to IJ’s Gold 2019 Best Agency to Work For – Midwest. The overwhelming sentiment expressed by TBG employees is that it’s a workplace where

every person is appreciated, where each employee feels supported, where staff members not only are encouraged to succeed — both personally and professionally — they are guided in their efforts to do so. “I believe our employees nominated The Bulow Group because we are constantly asking them what’s important to them,” Mike Bulow said. “Based off their responses we are continuously adding additional perks to give them a better work/life experience. We’ve implemented a lot of new ideas and structure that makes coming to The Bulow Group a pleasure. We believe in physical health, mental health, spiritual health and financial health. We feel like our job is never done and we can always do better for our employees and agency!” One employee who has been with the company for five years said they “love coming to work each and every day.

TBG employees bond at an axe-throwing event. INSURANCEJOURNAL.COM

Every person who works here is a vital part of our company’s success and every person is appreciated for their hard work. There is a company-wide support for one another that starts with the agency principals.” Anther wrote: “Mike and Tom take the time weekly to help us with WHATEVER we need. This has really made the difference in my success as a producer. I have never felt more supported in a role that I do at TBG.” Employees are encouraged to speak up and voice their opinions, Mike Bulow said. “My partner Tom and I are under the mindset that we do not know it all and we use that mentality throughout the agency. Our producers are encouraged to share ideas and strategies that work for them, our CSRs are empowered to make decisions and implement ideas. We do not believe in limiting our employees, we find out what is important to them and make it important to us,” he said. The agency's workplace philosophy of no limitations extends to clients as well, according TBG employees. “We practice what the company preaches,” said one

survey respondent. “We want our clients to reach their goals, even outside of insurance. We are truly a resource and advocate to our clients where they can trust us and call us for advice or recommendations on working with other companies for other needs that they might have.” Another said that client advocacy also extends to claims. “Instead of accepting a claim denial at face value, we comb through policies to ensure there is absolutely no coverage applicable — on several occasions, finding coverage the adjuster missed. This is not a value-add, but a constant.” The agency’s “Employee for the Day” service is a distinguishing factor, as well as a practical application of TBG’s focus on what’s important to their client, one employee said. Under the program, “our producers spend a day with our clients to truly understand their operation and pinpoint where we can help enhance their current safety programs and better manage risk.” Asked what he would say to other agency owners who would like to create a “Best Agency” workplace, Mike Bulow replied: “My advice would be to REALLY care, and support your teammates. Make what’s important to your employees important to you and you will never go wrong.”

OCTOBER 7, 2019 INSURANCE JOURNAL | 27

NATIONAL | Special Report | Best Agency to Work For

South Central

Hotchkiss Insurance Dallas, Texas

The Hotchkiss Way By Stephanie K. Jones

xcellent client service, emphasis on fundamentals, culture of giving back, focus on employee well-being, sound financial management, and a bright prospect for the future. Those are just a few of the many positives the employees of Texas-based Hotchkiss Insurance Agency (HIA) cited in nominating their agency as a best place to work. Hotchkiss employees responding to Insurance Journal’s 2019 Best Agencies to Work For survey were full of praise for their company, which has 121 employees in offices in Dallas, Houston, Fort Worth and San Antonio, and revenues of $25 million annually. The result of that widely expressed enthusiasm is HIA’s selection as Gold 2019 Best Agency to Work For — South Central. As one survey respondent put it: “I feel that Hotchkiss is a great place to work. Our leadership changed and went

to a partnership with a CEO, CFO and COO. This change was very good for our agency as the CEO’s vision is bright for our future. Considering all the agencies that are being bought and sold in this day and age, it’s comforting to know that this is not the plan for Hotchkiss! We have a goal for 2020 — enterprise wide — and every associate is contributing to this goal!” In emailed comments to Insurance Journal, CEO Michael Hotchkiss said the agency’s employees often communicate “that they appreciate the fun and engaging environment, as well as the chance to accelerate their careers here. We’re very committed to supporting and growing our employees inside and outside of the walls of Hotchkiss Insurance, and we’re honored to receive recognition of that focus.” He added that HIA, over the past five years has “grown significantly” and continues to expand its offerings for clients.

Hotchkiss employees in Houston celebrate Christmas in a big way. 28 | INSURANCE JOURNAL | OCTOBER 7, 2019

“Our firm only grows when our people grow. Growth and accomplishment feel good. I believe these are some of the reasons our team members enjoy working at Hotchkiss Insurance,” he said. As one of the few larger, independent, private insurance agencies in Texas, HIA has benefited from the tremendous opportunity that exists in the state, he said. “We have worked hard to create a values-based culture at Hotchkiss that gives team members room for initiative and growth. When these aspects come together and we provide valuable impact to our clients, work becomes a great place to be.” Responding to IJ’s survey, one employee credited HIA’s leadership for developing sound financial and sales management plans “that have paved the way for our past, current and future growth. Our ability to attract and retain top talent ensures that we have the human capital in place to execute and maintain our growth plan.” Another said: “I have never worked for another employer whose main focus was their employees’ happiness and well-being were priority. The work - life balance is amazing and could not ask for more.” Several employees expressed their appreciation for the company’s emphasis on fundamental behaviors that contribute to the success of the agency, staff and clients. “We spend significant time as a firm every week focusing

on fundamental behaviors. We’ve created 35 different behaviors, and we call these the Hotchkiss Way. When each team member at our firm is focusing on the right values and behaviors, our co-workers, trade-partners and clients win,” Michael Hotchkiss said. Others employees highlighted Hotchkiss Helps, a conduit through which the company and its employees are able to contribute to their communities and support those charities that are important to them. “Giving back to the community is very important to me. We have given either our time or have raised funds to benefit different charities. This year’s charity is Soldiers’ Angels which is near and dear to my heart as it supports our veterans!” said one employee. “We’re a purpose-driven organization dedicated to impacting our clients and the world around us. We know what we do, how we do it, and most importantly why we do it,” Hotchkiss said. “When you’re focused on your purpose, with your whole team aiming at the same target with the same values, everything else takes care of itself,” he added. INSURANCEJOURNAL.COM

NATIONAL | Special Report | Best Agency to Work For

Southeast

Acentria Insurance Destin, Fla.

A Growing Agency With a Small Business Feel By Amy O’Connor

lorida-based Acentria Insurance has been busy since its founding by industry veteran Kendall McEachern in 2010. The personal and commercial lines agency has acquired several agencies and now has 50 locations and more than 500 employees in the state of Florida and Southeast region. But employees who nominated the agency for Insurance Journal’s 2019 Best Agency to Work For survey say despite that growth, the company still has its small business culture. “Acentria is vibrant and growing,” said a survey respondent. “The culture is based on a team/family environment in which we all thrive together. Work hard, play harder and give back to the local communities in which we live is at the core of what we do.” CEO McEachern says the agency’s leadership team places a great deal of emphasis on creating a positive corporate

culture to ensure employees enjoy coming to work each day and feel meaningful – focusing not on only their professional development but their personal development as well. “To be recognized as a finalist for one of the Best Agencies to Work is a true honor and testament to the dedication of our team members,’ McEachern said. “Our leadership is dedicated to providing our team members with well-rounded opportunities to include: benefits packages, retirement planning options, wellness programs, fun activities, team building and our own community give back program.” Employees agreed, saying Acentria management treats them as part of the team. “I honestly believe our owners, management cares for their employees. They make sure that we have what we need in our jobs and have the tools to do the work. They are gracious to allow opportunities to have time off and encourage

The Acentria exectuive leadership team outside the company's headquarters in Destin, Fla. INSURANCEJOURNAL.COM

you to take time for yourself and your family,” said one survey respondent. Another respondent cited the management team’s regular check-ins with staff as an example of its commitment to employees. “They know your name and are willing to spend time listening to any concerns you have,” said the employee. “When you have positive caring people in top positions it trickles down to affect the whole company. It’s nice to know what the expectations are and that they are equal across the board.” Many employees said the #AcentriaCares community give back program is one example of how the agency empowers its team members to get involved in the community, either through donations or by offering paid time off to volunteer. McEachern said more than $1 million has been donated to local non-profits through #AcentriaCares. Employees said the team also bands together to help those in hurricane-impacted areas around the state and country. Many Acentria employees were directly affected by 2018’s Hurricane Michael that hit the Florida Panhandle, and employees said the company came together to help them while also helping clients. “During any hurricane or disaster, this agency

really rises to the occasion… #AcentriaCares is really more than a tagline,” said an survey respondent. Employees also praised the agency’s inclusivity when it comes to hiring, leadership and promotions, saying it is “very fair and supportive of growth from within at all levels.” They also appreciate Acentria’s access to markets, marketing materials, and the company’s investment in sales and marketing tools so they can focus on being the best advisors to their clients. McEachern said that building a successful agency and creating a positive work environment starts at the top. “Our leadership team focuses on a positive, family-oriented work environment with an open-door policy. Team members need to have meaning, purpose, be involved and feel like part of the bigger picture,” he said. Acentria employees say being part of a growing agency with great leadership is exciting and they appreciate the agency’s commitment to culture no matter how big the company gets. “I have worked in 5 different agencies throughout my carrier. This is by far the best agency ever. I love everything about them and will never consider leaving this agency,” said an employee.

OCTOBER 7, 2019 INSURANCE JOURNAL | 29

NATIONAL | Special Report | Best Agency to Work For

West

Snapp & Associates San Diego, Calif.

A Democracy of Ideas Hafford and Jim Snapp, and has been under its current ownership since 1992. The firm offers personal and commercial insurance, with an emphasis on serving the hospitality, construction and real property industries. “Our brand is getting bigger and better in those segments,” said Dan Beck, senior vice president and co-owner of the firm. Beck gives credit for that to the employees, and the ideas they bring in. Management regularly solicits staff feedback, a process Beck calls being part of “a democracy,” and then the leaders there take what they hear and make improvements. “We’re incredibly engaged with the staff. We’re not distant owners,” Beck said of he and co-owner John Toon, president. The pair split responsibilities to ensure both are active in the various areas of operations. The other key to a happy and

successful workplace has been hat phrase “you can’t be to hire people all things to all people” who are new to has been tossed out the insurance, and then help them window at Snapp & Associates Insurance Services. grow. Accurate and regular salary “Our best employees are the reviews. Room for growth. ones that we brought in from a Good leaders who don’t baseline entry-level position,” micromanage. A welcoming Beck said. “We need to be environment, and positive developing young talent to energy. Full reimbursement come into this industry.” Many employees in comfor continuing education, and ments made while nominating paid medical benefits. A high their firm as a Best Agency standard of customer service. to Work For praised Snapp & Flexible working conditions. Associates leaders for that. And of course great holiday “When I started at Snapp parties. and Associates, I had just quit Those are among the a front-of-the-house cashier attributes employees called out position,” one employee numerous times in this year’s wrote. “In just three years, I Insurance Journal Best Agency was licensed by the state of to Work for Survey. Snapp & California and promoted." Associates was awarded Gold – The employee later pursued West. a CISR designation, and was The San Diego, Calif.-based thereafter encouraged to keep firm has 65 employees and going. reports $8.5 million in annual “No strings attached, no revenue. Snapp & Associates contract, no payback expected was founded in 1947 by Doug if I leave,” the employee continued. “It’s difficult to find a company that cares about you as person and not just a number.” Having an atmosphere that feels like family was also an oft-mentioned praise. “Snapp & Snapp & Associates staff participating in a game in which participants blow up the Associates is a balloon until it pops. Winners got two Disneyland tickets. The game was a preamble great place to work to the Florida Georgia Line Concert in Chula Vista on Sept. 20. Employees and their because we have spouses tailgated and then went to the concert. a great family

By Don Jergler

30 | INSURANCE JOURNAL | OCTOBER 7, 2019

atmosphere,” an employee wrote. “There’s room for growth and the owners are involved in the community! We are reviewed annually for salary and bonus incentives! They pay for our health insurance and also match our 401K. Owners are approachable and hardworking!” “Snapp and Associates has been a family,” another employee wrote. “I know a lot of people say that, but it is the best description. I see my owners as people who want the best for me and care that I excel in life. There is no contract stating if they provide education I have to pay back, or even that I have to pay for education, and they reimburse. It is 100% paid in full by the company with no strings attached.” Just as importantly, perhaps, is that Mondays at Snapp & Associates aren’t so bad. “They make sure that I am healthy with top-ofthe-line healthcare for free and offer flu shots in the winter months,” the employee continued. “My coworkers are always there for each other when someone is out or falling behind. There is no ‘This isn’t my job or account’ attitude. It is always a team effort, from the top down. I don’t dread coming to work, and ‘Ugh Monday’s’ feelings are so low I shouldn’t even mention it.” INSURANCEJOURNAL.COM

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Idea Exchange: When Words Collide Resolving Claim Disputes:

STEP 3

Research and Document the Interpretation – Part 2 of 3

ast month’s column began a three-part series on legal and contractual principles that can be used to resolve most By Bill Wilson coverage and claim disputes without litigation. Just as you do not have to be an attorney to resolve a contract dispute, you do not have to be an attorney to employ lawyerly principles of contract resolution. Last month’s column was devoted largely to the principle of semantic ambiguity, focusing on the legal doctrines of noscitur a sociis and ejusdem generis. And, while ambiguity may be the mother of all policyholder coverage arguments, there are well over a dozen other principles that can be used to resolve disputes, often in support of ambiguity allegations.

Policy Language Intent

When a court interprets the meaning of insurance policy terms, it often attempts to ascertain the intent of the policy language. However, if that intent is not clearly and unambiguously expressed, that intent will often not be upheld if disadvantageous to the insured. For example, a construction trailer was modified to house a scale model of a manufacturer’s production line. The plan was for two employees to transport the trailer to trade shows across the country on a regular basis. However, the reality INSURANCEJOURNAL.COM

was that, in the past year, the trailer had only been away from the premises on one occasion for two to three days. While at the premises, it was vandalized to the tune of $12,362.62. The adjuster denied the claim under the property policy’s Property Not Covered provision which excluded vehicles that (1) are licensed for use on public roads, or (2) are operated principally away from the described premises. The agent was able to get the denial reversed by focusing on the word “are.” In particular, the trailer was legally supposed to be licensed…but it wasn’t. The exclusionary language did not apply because it said it applied to vehicles that “are” licensed and not to vehicles

that “are, or are required by law to be, licensed.” If that was the intent of the insurance contract drafter, it was not clearly expressed in the policy language. So, the claim was paid and the insurer has the option of clarifying the policy language to comport with the “required by law to be” language found in similar policies.

Reasonable Expectations

Sometimes an insured’s reasonable expectations for coverage may override the express language of a policy. For example, in American Standard Ins. Co. v. Allstate Ins. Co., 210 Ill. App. 3d 443, 155 Ill. Dec. 162, 569 N.E.2d 162, (App.

continued on page 34 OCTOBER 7, 2019 INSURANCE JOURNAL | 33

Idea Exchange: When Words Collide continued from page 33 Ct. 1st Dist.,1991), a motorcycle passenger was killed and the claim was denied under an auto policy that excluded the use of vehicles with less than four wheels. However, the policy jacket had included an illustration of a man and a woman on a motorcycle, creating an expectation of coverage, despite the clear language to the contrary in the policy. Keep in mind, though, that the key word in this principle is “reasonable.” The insured’s expectation must be objectively reasonable under the facts and circumstances of the case.

Parol and Extrinsic Evidence

Under the parol evidence rule, the language within the four corners of the insurance contract usually governs, but when ambiguity is demonstrated, certain extrinsic evidence may be introduced to establish the meaning of such language. This may include internal documents or communications, authoritative interpretive sources, or even the drafting history of policy forms. To illustrate, in its 1991 countrywide homeowners program filing, Insurance Services Office (ISO) explained a form language change: “This change is being made to avoid having the Special Coverage forms provide lesser coverage than what is provided under a Named Perils form.”

On many occasions, I’ve used this filing memorandum excerpt to get claims paid that were excluded by open perils forms but would have been covered by named perils forms.

Illusory Coverage

When my residence was hit by a tornado in 2013, I had 19 trees downed and needed to hire a tree service for the job. Of course, I asked each bidder for proof of insurance. One of the bids I got was from a recent startup whose liability insurance was provided by an E&S carrier under a 2004 ISO CGL policy. Nothing wrong with that, but many of the 42 endorsements attached to the policy were problematic, especially the one entitled “Exclusion – All Hazards in Connection with Ongoing Operations and Your Work.” In other words, they had no coverage for ongoing or completed operations. Similarly, the late Don Malecki, CPCU wrote an article about a roofing contractor whose CGL policy excluded…roofing operations. Are such policies illusory in coverage? I would argue that they are since they really do not cover any activities the business exists to perform other than those that take place on its premises. However, many courts will not uphold arguments that coverage is illusory unless there is virtually no coverage of any kind.

So, the value of this principle in litigation might be limited. However, keep in mind that we are attempting to resolve claim disputes without litigation and it’s possible that an appeal to the insurer could be successful on the basis that the coverage provided was illusory. In any case, this situation illustrates the importance of prevention of coverage gaps by properly vetting policy deliverables.

Public Policy

Sometimes a governing authority will not uphold policy language because it violates public policy. This principle rarely works for the policyholder, however, unless a regulator gets involved or the claim is litigated.

Reformation and Rescission

If it can be demonstrated that, for example, the failure to insure a structure was a mutual mistake, the policy can be reformed to include coverage. On some occasions (e.g., a “scrivener’s error”), even unilateral mistakes may yield to reformation or rescission.

Substantial Performance

A property policy required that a proof of loss be filed within 60 days. The insured submitted the loss report 61 days after the loss. The initial denial was rescinded based on the premise that the performance of the insured was “close enough.” This is not uncommon at all following catastrophic or widespread losses where it may not be feasible for an insured to file a report within the time frame that might be ample most of the time. Next month, we’ll explore nine other legal and contractual resolution principles before wrapping up this 12-part series of articles with Step 4 of the claim resolution process, Pleading Your Case, the following month. Until next time, don’t forget to RTFP! Wilson, CPCU, ARM, AIM is the founder and CEO of InsuranceCommentary.com and the author of the book “When Words Collide: Resolving Insurance Coverage and Claims Disputes.” He may be contacted at Bill@InsuranceCommentary.com.

34 | INSURANCE JOURNAL | OCTOBER 7, 2019

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Idea Exchange: Human Resources

Reimagining

Corporate Culture to Engage Employees

oday’s work environments are vastly different from those of a couple decades ago. Open floor plans are the norm By JoJo Harris and physical doors are often reserved only for top executives and meeting spaces. Technology has made it possible for professionals to work from anywhere at any time. Smartphones are never far from reach and wearable technology makes individuals accessible at all hours of the day. In today’s hyper connected environment, the lines between personal and professional lives are blurred and often intertwined. At the same time, younger generations have different expectations of their employers and office environments than the generations before them. Work is seldom reserved for the hours of nine to five and it’s not uncommon for offices to offer complimentary meals and snacks, on-site gyms and even dry-cleaning services. In today’s employment landscape, insurance organizations must create collaborative, forward-thinking workplaces that attract and engage employees of all generations. However, as most know, creating a culture that resonates with employees involves much more than free snacks, cappuccino machines or a foosball table. By reimagining the office environment with a focus on engagement and growth, employers can increase retention, innoINSURANCEJOURNAL.COM

vation and productivity.

Start with Leadership

Culture permeates throughout an organization, with leaders setting the overall tone. Great leaders ensure all employees feel valued and connected to the company’s performance, regardless of their levels within the organization. These leaders are clear on what needs to happen to achieve goals, as well

continued on page 36

Idea Exchange: Human Resources continued from page 35 as how each employee’s role contributes to the greater organization’s success. The leadership team is also responsible for exemplifying and encouraging transparency and collaboration. Keep employees aware of company initiatives, plans and priorities and admit when you don’t have all the answers. As modernization efforts become more commonplace, employees should understand their roles in the process and how those roles may change in the future. By aligning employees with company goals and demonstrating how each employee is vital to company success, leaders can help their teams feel a sense of purpose and belonging to a greater cause.

Involve Employees in Defining Culture

While leaders set the example, encourage employees to have a stake in how culture is built and recognized throughout the organization. This may mean creating an activities committee tasked with developing opportunities for individuals to interact outside of work and get to know one another. It could also include seeking input from employees on how to best recognize wins and acknowledge colleagues who go above and beyond their standard job descriptions. True culture must be created, lived and breathed by everyone within the organization. All employees should feel a sense of ownership for the company’s culture. Leaders must also create an environment where employees are empowered to bring their ideas forward, knowing that they are being heard and considered. This is more than a simple survey or suggestion box. Encourage managers to continually ask for employee feedback with the full intent of applying their thoughts and ideas whenever possible.

Foster Inclusion

Encourage employees to bring their whole selves to work. Gone are the days when employees kept their professional and personal lives completely separate. Individuals have interests and priorities outside of work, which help 36 | INSURANCE JOURNAL | OCTOBER 7, 2019

Building on employee strengths rather than trying to fix weaknesses results in much greater productivity. shape their perspectives and ultimately make them well-rounded professionals. Encourage your staff to be themselves at work, rather than conforming to a separate “work” persona. This means cultivating an environment where differences and unique experiences are embraced and celebrated. Afterall, diversity of thought and backgrounds are key contributors to innovation and problem-solving. Additionally, by recognizing people have responsibilities and obligations outside of work, employers are creating environments that keep people fulfilled and engaged. Flexibility in hours and work locations demonstrate organizations are understanding and respectful of employees’ needs and willing to accommodate family obligations and other interests outside of work.

Focus on Employees’ Strengths

Tap into employees’ superpowers by identifying unique strengths and developing and focusing on those attributes. Think about how skills can be leveraged for the betterment of the business, while helping employees shine. Professionals who regularly use their strengths are also noticeably more engaged, according to research by Gallup. It’s likely that employees will excel in some areas and lack skills in others. Enable staff to bring their unique talents to the table and don’t try to fit them into a specific box. Building on employee strengths rather than trying to fix weaknesses results in much greater productivity. By embracing different work styles, you’ll build an open culture where strengths are highlighted, celebrated and leveraged to increase productivity.

Emphasize Development

In today’s candidate-driven market, growing talent within the organization is more important than ever. However, it also

impacts retention and overall job satisfaction. Gallup found that 87% of Millennials consider professional development to be important. According to Deloitte, 28% of Millennials who plan to leave their organizations in the next two years say it’s due to lack of learning and development opportunities. This is more than growing employees within their current roles. Have talent reviews at least once a year and take the time to ask about employees’ long-term career aspirations. Then, create a plan to help move them toward those goals. Facilitate mentorships across departments and functions. Provide exposure to other business units and teams. Encourage projects and experiences that will take individuals outside of their comfort zones and stretch their professional skills.

Have Fun and Celebrate

Don’t forget to celebrate the great work your employees are doing. This may be through peer-to-peer kudos or more formal company recognition programs. It can be easy to get caught up in projects and deadlines; encourage employees to take some time to reflect on their work and enjoy their wins. It’s possible to do great work while having fun along the way. Company culture can take many forms, but it goes much deeper than office décor and a handful of perks. By helping employees connect to their colleagues, work and company, insurers can cultivate an environment that attracts and retains professionals from all generations. Culture is actively created and lived, starting with leaders and permeating throughout the entire organization. Harris is senior vice president of human resources at The Jacobson Group, a global provider of talent to the insurance industry. Email: jharris@jacobsononline.com. Phone: 312-884-0438.

Idea Exchange: Emerging Risks How Emerging Risks for

Medical Device Manufacturers

Create Opportunities for Agents

he medical device industry is an expanding market with significant growth forecasted over the next decade. By Anthony T. Levy According to KPMG data, global predictions reveal the life sciences sector will grow by more than 5% per year, reaching nearly $800 billion by 2030. Tech innovations (including artificial intelligence), an aging U.S. population, increased healthcare spending and an improving economy have fueled the industryâ&#x20AC;&#x2122;s rise. As this market evolves, medical device manufacturers face ever-changing risks. It is critical for these manufacturers to understand these unique risks and have plans in place to help mitigate them. This presents a significant opportunity for independent insurance agents to serve as valued advisors for their life sciences clients. Medical device manufacturers face a variety of risks and often are not fully aware of how they may be exposed. Insurance protection can be a complex area for such organizations with high-risk implications. Insurance programs built to address common risks can help protect these clients. As agents look to help protect their medical device manufacturer clients, there are five common risk areas to consider: contractor liability, human clinical trials malpractice allegations, end-user training liability, errors in human diagnostic testing, and product defects. INSURANCEJOURNAL.COM

Five Common Risks

Contractor Liability. A contractor hired to conduct training on a medical device may have allegations brought against him or her for providing inadequate training, which can present a vicarious liability to the organization. Ensuring organizations have coverage for medical malpractice, including vicarious liability risks, can offer important protection. Human Clinical Trials Malpractice Allegation. Pharmaceutical or device manufacturers developing products used in human clinical trials can face allegations of clinical trial malpractice. This can also include risks stemming from the product itself. The right medical professional and product liability coverages are critical, especially for clinicians providing patient care, administering the trial product, and reviewing subject data to determine product effectiveness. End-User Training Liability. Manufacturers with an FDA-approved product may have clinicians, either on their payrolls or contracted, who provide product end-user training to either clinicians or direct to consumers. In either case, the direction and advice provided by the clinicians can open the organization up to product liability and professional liability exposures. Errors in Human Diagnostic Testing. In vitro diagnostic device manufacturers with an FDAapproved product or a laboratory-developed test,

continued on page 38 OCTOBER 7, 2019 INSURANCE JOURNAL | 37

Idea Exchange: Emerging Risks continued from page 37 which includes in-house human diagnostics, likely will have pathologists on their payrolls who run these tests. These pathologists could make a mistake, or the test could fail to function as designed, causing harm to the consumer. These tests follow the Clinical Laboratory Improvement Amendments (CLIA). CLIA requires clinical laboratories to be certificated by their state as well as the Center for Medicare and Medicaid Services (CMS) before they can accept human samples for diagnostic testing.

Medical device manufacturers face a variety of risks and often are not fully aware of how they may be exposed. Product Defects in Custom Devices and Fillers. Manufacturers of orthotic or prosthetic devices that also provide a custom device or device fittings can experience defects. An orthodontist or prosthetist practitioner will perform detailed assessments to determine a patientâ&#x20AC;&#x2122;s orthotic

38 | INSURANCE JOURNAL | OCTOBER 7, 2019

and prosthetic needs and functional status. Certified technicians help orthotic practitioners with patient management as well as with fabrication, fit and maintenance of orthotic and prosthetic devices. An assessment, fabrication, fitting or device maintenance error could result in harm to a patient.

The Role of Independent Agents

Understanding the clientsâ&#x20AC;&#x2122; processes, business models and customers can help better identify their risk areas and build coverage plans that work with their organizations. Identifying whether a risk is covered under product liability or medical professional liability (or medical malpractice liability) helps agents identify possible gaps in coverage. There have been situations where an organization is missing a key medical professional liability coverage, thinking it was covered under their products liability coverage or errors and omissions, unfortunately leaving the organization open to risk. In addition, the more comprehensive the coverage plan, the fewer chances for coverage gaps. When building insurance

plans, an agent may access multiple markets to assemble a plan that works for a client. They may seek cyber from one carrier, professional liability from another and product liability from a third carrier. As agents know, there are several benefits to providing coverage through a single carrier. We see the most successful agents in this space guiding clients toward a single carrier that has a deep understanding of their unique risks. As a result, the customer benefits from a more seamless customer experience and the agent increases customer retention. As the development of medical solutions continues to progress, agencies can help life sciences clients stay informed of potential coverage gaps to address their unique needs with flexible coverage and limit options and partner with experienced carriers that offer customizable, cohesive coverage solutions under a single policy. With an understanding the intricacies of the market, agents are well positioned to better protect their life sciences clients. Levy is vice president, technology, at The Hanover Insurance Group Inc.

INSURANCEJOURNAL.COM

Idea Exchange: Millennials Blending Generations: Why Millennials, and the Industry, Must Bridge the Gap

orkplaces everywhere are becoming more flexible. People now work irregular hours, work from home, By Molly Strangstalien work out of state and even across oceans. This phenomenon is no surprise given the influx of new technology. The large number of millennials in the workforce is surely contributing to this new office outlook. Millennials are not only in the workplace; they are business owners and managers and involved heavily in decision making. In a technology driven world, they are at the forefront of change. According to Inc.com, millennials and

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Idea Exchange: Millennials continued from page 39 are getting to make their own schedules and work around taking care of young families. What does this mean for the insurance industry? How does this affect hiring managers, and how do insurance organizations develop people from a distance? How does the industry approach the idea that this ideology of flexibility and collaboration is entitlement? How does it manage this ideology and remain successful? What happens if the insurance industry stays in a zone of complacency and becomes stagnant? What about the clients? In this last year, I have had to hire two retirement replacements. This was a challenge in multiple ways: I cannot replace the years of experience that will be leaving us, I am hiring in offices that are not close to me, and I have to view these positions through the eyes of the workforce available to me, rather than the employees that are retiring. This means that the other half of these teams, the agents, will be hit with some dramatic changes. The byproduct of this is no buy-in, and giant hurdles regarding trust, processes, and capabilities. Part of this stems from millennial loyalty. If we are not challenged enough, if we are not being given learning opportunities, and if we don’t feel that we are given the chance to enact change – we will be looking elsewhere. Many hiring managers worry about the loyalty of a millennial. Onboarding and training costs are on the rise, so this must be controlled by taking a look at how we operate. We cannot change unless we change. This may seem obvious to some, but it doesn’t make it any simpler. How do you blend change and growth and keep a small team comprised of a millennial, and a couple of Gen Xers happy and fulfilled? How do you help them develop communication techniques that satisfy all parties – especially when there is a remote worker? This is no easy feat, regardless of the technology available to us. The issue becomes what drives each 40 | INSURANCE JOURNAL | OCTOBER 7, 2019

person. One person might be driven by the difference they can make in their community while another person might be driven by the service they can provide. They are the same goal, essentially, but they are not accomplished in the same manner.

As new agents are being trained, they do not have the same sense of urgency as their older counterparts do. This does not mean they lack service skills, rather, they have a different approach to meeting the need. A millennial is not diehard when it comes to client requests. They will question things and look at different solutions. This is not typical in the insurance industry: we see a need for instant results and instant answers. As new agents are being trained, they do not have the same sense of urgency as their older counterparts do. This does not mean they lack service skills, rather, they have a different approach to meeting the need. Where an older agent may make a promise and then finalize that on the back end, a millennial will say, “Let me see what we can do for you." What does this mean? That young

agent will work so hard to get that need met. They will collaborate, ask for help, and look for solutions. They are driven by problem solving and their ability to learn. Failure is not emasculating; it is an opportunity. This becomes both a blessing and a curse. While these traits are beneficial in the workplace, it is hard to mesh generational differences in the workplace. The problem becomes a battle of which method is the right one. Is there a right way to serve our customers? Is there a correct way to interact with our coworkers? Why do we get so upset when someone else does something differently than we do? Change is hard, and a new generation busting into the workplace and essentially flooding it with new ideas is difficult. Time is, of course, essential. However, gradual buy-in of collaboration techniques and team building skills help to bridge this gap. All parties, millennials included, must be willing to forge ahead with a goal of working together, meeting the needs of our clients, and facing the ever-changing dynamic of this industry. Strangstalien has been in the insurance industry for nearly a decade, and currently works for the thriving family owned insurance agency, Tricor, based out of the Midwest. In her current role she leads a small team of commercial insurance account managers. INSURANCEJOURNAL.COM

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Excess Liability

Market Detail: Shield Commercial

Insurance Services (shieldins.net) can help protect insureds with the extra coverage they need with an excess liability insurance policy. For only a few hundred dollars a year, most businesses can get the extra coverage. Available limits: Minimum $1 million, maximum $10 million Carrier: Unable to disclose States: All states except Alaska, Colo., Dela., Ill., Maine, Mass., N.H., N.J., N.M., N.Y., R.I., Vt., and Wash. Contact: Rob Anderson at 760-345-9029 or e-mail: randerson@shieldins.net

HazMat Hauler

Market Detail: Landmark E&S (landmark-es.com) provides a comprehensive insurance program for hazardous and non-hazardous waste transporters. We work closely with environmental carriers to tailor an environmental package program protecting hazardous and non-hazardous haulers from their operations. Coverage highlights include: auto pollution coverage (CA9948, MCS-90); enhancements such as wrong delivery of liquid products, trailer interchange, garage liability, and coverage for leased vehicles and owner-operator vehicles within the fleet; blanket additional insured, primary/non-contributory wording, waiver of

subrogation; non-owned disposal site coverage endorsement; site pollution liability coverage available; underground storage tanks endorsement available; state and federal auto filings as needed. Target classes include: non-hazardous waste disposal, transport, storage and treatment operations; hazardous materials or hazardous waste transporters – bulk chemicals, fuels, blended liquid products, drummed products, contaminated soils; medical waste haulers; recycling facilities; septic service companies; solid waste haulers; portable toilet service companies; garbage or refuse haulers. Available lines of coverage: GL/PL/CPLC, auto, WC, excess & EIL. Premiums starting at $2,500. Available limits: Minimum $1 million, maximum $50 million Carrier: Unable to disclose States: All states Contact: Nancy Huynh at 949-534-9106 or e-mail: nhuynh@landmark-es.com

Workers' Comp for Shooting Sports

Market Detail: Sage Program Underwriters (www.sageuw.com) specializes in workers’ comp for the shooting sports industry. Sage has had a national WC program for this industry since 2007. Eligible classes include: indoor & outdoor ranges; trap & skeet; retail gun stores; firearms and ammo manufacturing risks. Available limits: As needed Carrier: Unable to disclose, admitted States: All states except Alaska, Hawaii, N.D., Ohio, Wash., and Wyo. Contact: Chuck Holdren at 833-724-3111 or e-mail: chuck@sageuw.com

Business Insurance

Market Detail: West Bend Mutual

Insurance Co. (www.thesilverlining.com) offers property, liability, business auto, workers’ comp, crime, mobile equipment, business umbrella, surety bonds, E&O, EPLI, and D&O, coverage for various classes. Available limits: As needed Carrier: Unable to disclose.

States: Ill., Ind., Iowa, Ks., Ky., Mich.,

Minn., Mo., N.C., Ohio, Tenn., and Wisc.

Contact: Stephanie Averill at 800-236-5010

or e-mail: saverill@wbmi.com

Special Event Insurance

Market Detail: The BTIS (Builder &

Tradesman Insurance Services Inc.) (btisinc.com) program has been designed to meet the needs of venues and facilities that require their event holders to secure their own party insurance, birthday insurance and holiday party insurance coverage, and offers broad coverage and low prices. Available limits: As needed Carrier: Various, admitted and non-admitted available States: All states Contact: Jeff Gibbs at 855-359-5529 or e-mail: jgibbs@btisinc.com

Service Line Coverage

Market Detail: Pacific Specialty Insurance Co.’s (www.paciticspecialty.com) service line coverage provides protection from an unexpected loss caused by a service line failure. This sometimes unforeseen and costly exposure is not covered under most homeowners insurance policies, and most homeowners do not realize they may be responsible for the underground service lines from the street to their home. This product protects the homeowners by extending coverage for damage to underground piping or wiring that connects a home to a public utility service provider or to a private system. Available limits: As needed Carrier: Unable to disclose, admitted States: Ariz., Calif., Conn., N.J., and Texas Contact: Pacific Specialty, 800-303-5000, e-mail: questions@pacificspecialty.com

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Idea Exchange: M&A Review A Blistering Start to 2019 Closely Tracks 2018â&#x20AC;&#x2122;s Record-Setting Numbers

number of publicly announced deals that By Brian Ambrosia closed in the insurance distribution sector during the first two quarters of 2019 closely tracked the number of deals during the same period in 2018, suggesting that 2019 may be another record-setting year with respect to deal activity. With 580 deals closed during the calendar year, 2018 set the high-water mark with respect to the number of announced transactions. Some 283, or 48.8% of the total, closed in the

first half of the year. The first half of 2019 during which 280 transactions closed was equally frenetic and suggests that we are poised to repeat 2018â&#x20AC;&#x2122;s performance. This, despite the cooling of the broader U.S. economy, which retracted in the first half of 2019 due to the lagged impact of higher short-term interest rates, weak economies throughout Europe and a continued slowdown in China. The year 2019 got off to a torrid start with 85 transactions closed in January 2019, 17 of which were the result of the formation of Patriot Growth Insurance Services LLC, a new national retail insurance agency backed by Boston-based private

equity firm Summit Partners. Private equity backed buyers continue to lead the pack with 162 announced transactions in the first two quarters of 2019, or 57.9% of all deal activity.

The geographic locations of the sellers generally tracked the most populous U.S. states, including California, Texas, New York and Florida. Independent agencies completed 69 transactions year-to-date and public brokers accounted for 27 deals, or

approximately 10% of the total. Insurance carriers, banks and thrifts, and other buyers rounded out the numbers with a total of 22 transactions. The top five buyers in the first six months of 2019 represented approximately one-third of the total deal activity and the top 10 buyers accounted for roughly half. As a result of its formation, and several follow-on acquisitions, Patriot was the most active acquirer with 23 deals closed. Hub International Limited was the second most active buyer with 19 closed transactions in the first half of 2019. Hub is backed by Altas Partners

continued on page 48

Announced Deals (U.S. Transactions)

Note: All transactions in this presentation are announced deals involving public companies, private equity backed brokers, private companies, banks, insurtech companies (2017-2018 only) as well as others including private equity groups, underwriters, specialty lenders, etc. All in scope prior years are static as of 12/31 of given year. YTD 2018 data is as of July 31, 2018. All targets are U.S. only. This data displays a snapshot at a particular point in time and has not been updated to reflect subsequent changes in prior years, if any. MarshBerry estimates that only 15%-30% of all transactions are actually made public. Past performance is not necessarily indicative of future results. Source: S&P Global Market Intelligence, Insurance Journal, and other publicly available sources

44 | INSURANCE JOURNAL | OCTOBER 7, 2019

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Merger Announced and Acquisition Activity Date Buyer Announced Date

4/1/19 4/1/19 4/1/19 4/1/19 4/1/19 4/1/19 4/1/19 4/1/19 4/1/19 4/1/19 4/1/19 4/1/19 4/1/19 4/2/19 4/2/19 4/3/19 4/4/19 4/5/19 4/5/19 4/5/19 4/8/19 4/9/19 4/9/19 4/11/19 4/15/19 4/15/19 4/16/19 4/16/19 4/16/19 4/17/19 4/17/19 4/18/19 4/19/19 4/23/19 4/24/19 4/24/19 4/29/19 5/1/19 5/1/19 5/1/19 5/1/19 5/1/19 5/1/19 5/1/19 5/1/19 5/1/19 5/1/19 5/1/19 5/1/19 5/1/19 5/1/19 5/1/19 5/1/19 5/2/19 5/2/19 5/3/19 5/3/19 5/3/19 5/6/19

Buyer

April 1, 2019 - June 30, 2019 Seller Seller

White Mountains Insurance Group, Ltd. Embrace Pet Insurance Agency LLC Tokio Marine HCC NAS Insurance Services LLC World Insurance Associates LLC Lampe-Batkin Associates LLC World Insurance Associates LLC Joseph A. Britton Agency Inc. Peter C. Foy & Associates Insurance Services LLC Grosslight Insurance Inc. Peter C. Foy & Associates Insurance Services LLC Broadfield Group LLC NFP Corp. ShawHankins Inc. Hilb Group LLC Walker Brothers Insurance Hilb Group LLC eBenefits Group Northeast LLC Hamilton Insurance Group Inc. Jones & Associates Insurance Services, Ltd. Bush-Re-Shea Insurance Agency A.M. Peck & Company BroadStreet Partners Inc. Certain insurance assets BroadStreet Partners Inc. assets of undisclosed agency Marsh & McLennan Companies Inc. Lovitt & TouchĂŠ Inc. Cerity Partners LLC Bd4ria Insurance Agency LLC Hub International Limited Premiere Risk Management Hub International Limited M.B.I. Group LLC OceanPoint Financial Partners, MHC Paquin Insurance Agency Integrity Marketing Group LLC MultiState Insurance Center Inc. Hub International Limited Assets of Corey Steinbach Insurance Agency LLC Valley Insurance Agency Alliance LLC Nichols Insurance Agency LLC Distinguished Programs Holdings LLC ProHost USA Peter C. Foy & Associates Insurance Services LLC Hipskind Seyfarth Risk Solutions LLC Integrated Specialty Coverages LLC Paramount General Agency/Paramount Acceptance Corp. Brown & Brown Inc. ALMEA Insurance Inc. AssuredPartners Inc. Baldwin-Cox Agency LLC Fringe Benefit Group Century Healthcare Starkweather & Shepley Insurance Brokerage Inc. Wilson Agency Inc. AssuredPartners Inc. Cohen-Bailie Insurance LLC Digital Insurance Inc. Captiva Benefit Solutions LLC Integrity Marketing Group LLC Savers Management Group Inc. Montgomery Insurance & Investment Agency Inc. Champion Insurance Associates Inc. AssuredPartners Inc. Premier Insurance Corporation Inc. Tokio Marine HCC AmTrust Agricultural Insurance Services Digital Insurance Inc. Northwest General Insurance Agency Inc. Seeman Holtz Property and Casualty Inc. Schwarz Insurance Agency Inc. Charles W. Merriam & Son, Inc Armoer Risk Management Inc. Tompkins Financial Corporation Cali Agency Inc. BB&T Corporation Argenia LLC Tangram Insurance Services Inc. GMG Underwriters LLC Digital Insurance Inc. Benefit Group LLC NFP Corp. Excel Bonds & Insurance Services Inc. Hilb Group LLC Summit Insurance Services LLC Hilb Group LLC 360 Corporate Benefit Advisors BroadStreet Partners Inc. Certain insurance Assets BroadStreet Partners Inc. Certain insurance Assets BroadStreet Partners Inc. Certain insurance Assets BroadStreet Partners Inc. Certain insurance Assets Alera Group Inc. Shomer Insurance Agency Inc. Alera Group Inc. Shepler & Fear General Agency Inc. Alera Group Inc. HighRidge Insurance Services Alera Group Inc. ARMS Insurance Group LLC InterWest Insurance Services LLC Brenk & Co. Insurance Services Inc. Alliant Insurance Services North County Insurance Hub International Limited all assets of First Western Insurance Agency Inc. Reliance Global Group Inc. Fortman Insurance Agency LLC KTA LLC Ames Insurance Center Inc. Hub International Limited Resource Insurance Services Inc. NFP Corp. GCG Risk Management Inc.

Source: S&P Global Market Intelligence, Insurance Journal, other publicly available sources and MarshBerry proprietary databases Disclosure: All deal count metrics are inclusive of completed deals with U.S. targets only.

INSURANCEJOURNAL.COM

chart continued on page 46 OCTOBER 7, 2019 INSURANCE JOURNAL | 45

Idea Exchange: M&A Review Merger Announced and Acquisition Activity Date Buyer Announced Date

5/6/19 5/7/19 5/7/19 5/8/19 5/8/19 5/8/19 5/8/19 5/9/19 5/15/19 5/15/19 5/17/19 5/20/19 5/21/19 5/21/19 5/22/19 5/28/19 5/29/19 5/29/19 5/30/19 5/31/19 6/1/19 6/1/19 6/1/19 6/1/19 6/1/19 6/1/19 6/3/19 6/4/19 6/5/19 6/5/19 6/5/19 6/6/19 6/7/19 6/10/19 6/11/19 6/11/19 6/13/19 6/13/19 6/13/19 6/14/19 6/14/19 6/17/19 6/17/19 6/18/19 6/19/19 6/25/19 6/26/19 6/26/19 6/27/19

Buyer

AssuredPartners Inc. Aon Corporation W. N. Tuscano Agency Inc. Ryan Specialty Group LLC Rogers & Gray Insurance Agency, Incorporated Sunstar Insurance Group LLC Hub International Limited Relation Insurance Inc. High Street Insurance Partners LLC Confie Seguros Insurance Services Frederick H. DiMeo Insurance Agency Inc. USI Holdings Corporation Arthur J. Gallagher & Co. Arthur J. Gallagher & Co. Hilb Group LLC Arthur J. Gallagher & Co. Risk Strategies Company LLC Inszone Insurance Services Inc. Digital Insurance Inc. CoVerica Inc. NFP Corp. INSURICA Insurance Management Network Hilb Group LLC ELMC Group LLC BroadStreet Partners Inc. BroadStreet Partners Inc. AmWINS Group Island Holdings Inc. Brown & Brown Inc. Inszone Insurance Services Inc. Hub International Limited Arthur J. Gallagher & Co. AssuredPartners Inc. Digital Insurance Inc. Risk Strategies Company LLC Higginbotham & Associates Inc. Arthur J. Gallagher & Co. World Insurance Associates LLC AssuredPartners Inc. Digital Insurance Inc. Hub International Limited USI Holdings Corporation Hub International Limited The Amynta Group AssuredPartners Inc. High Street Insurance Partners LLC Digital Insurance Inc. AssuredPartners Inc. AssuredPartners Inc.

April 1, 2019 - June 30, 2019 Seller Seller

Esser Hayes Insurance Group Inc. Book of business Insurance Markets Inc. Atlantic Specialty Lines Inc. Paul Peters Agenyc Inc. Todd Agency Inc. Rims Insurance Brokerage Corp. Service First Insurance Korthase Flinn Financial Inc. Best Rate Insurance Agency Inc./Luxor Insurance Ozwald and Speaker Insurance Services Inc. Chernoff Diamond & Co. RPA Insurance Services LLC Innovative Coverage Concepts LLC Keane Insurance Group Inc. Cairnstone Financial LLC MainStreet Consulting Group Inc. McGhee & Assoc Insurance Agency Inc. Concord Benefits Planning Agency Inc. Agape Healthcare Partners, L.P. Outdoor Insurance Group First Texas Insurance Services, L.C. Pfister Insurance Inc. Rockport Benefits LLC Certain insurance assets Book of business Atlantic Risk Specialists Inc./ ARS-Latiff LLC Insurance Advantage LLC Twinbrook Insurance Brokerage Inc./ Twinbrook Insurance Agency Inc. Mosaic Insurance LLC Book Of Business MDV Wealth Planning Inc. Rivard Insurance Agency Inc. Trinity Benefit Advisors LLC Creative Insurance Solutions LLC Commercial Insurance Branch Abram Interstate Insurance Services Inc. Links Insurance Services Inc. Air Capital Insurance LLC Ironview Employee Benefits LLC CBIS,LLC Employee Benefit Concepts Inc. Foster & Parker Insurance Agency Inc. Nonprofit Unemployment Funds Services Inc. Horizon Insurance Agency LLC Assets of Tompkins Insurance Agency Employee benefits division Cathy Insurance Services Mccarthy & Trinka Inc.

46 | INSURANCE JOURNAL | OCTOBER 7, 2019

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October

2019 2019 N ATION A L INSUR A NCE INDUS TRY COUNC IL N ATION A L INSUR A NCE INDUS TRY COUNC IL

Fighting Fighting cancer cancer like like the the common common cold cold

MAGINE HARNESSING YOUR OWN BODY’S IMMUNE SYSTEM MAGINE HARNESSING YOUR OWN to treat cancer like the common cold.BODY’S City of IMMUNE Hope is a SYSTEM national

to treat cancer like the common cold. City of Hope is a national leader in cancer immunotherapeutics and tumor immunology leader in cancer immunotherapeutics and tumor immunology research, with an infrastructure unmatched by any other research, with an infrastructure unmatched by any other biomedical institution in the United States. biomedical institution in the United States. At City of Hope, immunotherapies such as T cell therapy, which At City of Hope, immunotherapies such as T cell therapy, which uses specialized cells produced by the immune system to target uses specialized cells produced by the immune system to target and kill cancer cells, and immune checkpoint blockade, which and kill cancer cells, and immune checkpoint blockade, which enhances the immune system to attack and kill tumor cells, enhances the immune system to attack and kill tumor cells, are actively in use. These therapies are not only effective for are actively in use. These therapies are not only effective for

patients with metastatic cancer but also provide renewed hope patients with metastatic cancer also provide renewed hope to patients with advanced stagebut cancers. to patients with advanced stage cancers. For more than 41 years, the National Insurance Industry Council For than 41City years, the National Insurance Industry Council has more supported of Hope in its mission to find the cures to has supported City of Hope in its mission to find the cures to cancer, diabetes and other life-threatening illnesses. cancer, diabetes and other life-threatening illnesses. To date, you have helped raise more than $35 million which has To date,more you have raise more thanaround $35 million whicheach has helped thanhelped 100 million patients the world helped more than 100 million patients around the world each year. Join us in our 2019 fundraising campaign honoring Alan year. Join us in campaign honoring Alan Jay Kaufman of our the 2019 H.W. fundraising Kaufman Group and help bring hope Jay Kaufman of the H.W. Kaufman Group and help bring hope to those who need it most. to those who need it most.

2019 National Insurance Industry Council 2019 National Insurance Industry Council campaign honoring Alan Jay Kaufman of campaign honoring Alan Jay Kaufman of

H.W. Kaufman Group H.W. Kaufman Group

ALAN JAY KAUFMAN ALAN JAY KAUFMAN 2019 Spirit of Life® Honoree 2019 Spirit of Life® Honoree Chairman, President and CEO Chairman, President and CEO H.W. Kaufman Group H.W. Kaufman Group Burns & Wilcox Burns & Wilcox

For more information on City of Hope’s National Insurance Industry Council, For more information on Cityorofcontact Hope’sKen National Industry Council, visit CityofHope.org/niic BirkettInsurance at kenbirkett@coh.org. visit CityofHope.org/niic or contact Ken Birkett at kenbirkett@coh.org.

CityofHope.org CityofHope.org

continued from page 44 LP and Hellman & Friedman LLC and has closed 208 publicly announced deals since 2012, trailing only Acrisure LLC, which had 244 during the same period of time. AssuredPartners Inc., Broadstreet Partners Inc., and Arthur J. Gallagher & Co. rounded out the top five buyers and collectively closed 49 deals through June 30, 2019. Other buyers in the top 10 include OneDigital Health and Benefits, Alera Group Inc., Acrisure, Brown & Brown Inc. and Hilb Group LLC. OneDigital led this group with 11 closed transactions, followed by Alera with 10, Acrisure and B&B both with nine, and Hilb with eight. The geographic locations of the sellers generally tracked the most populous U.S. states, including California, Texas, New York and Florida, which accounted for 102 of the 280 announced deals in the first half of 2019.

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9/26/19 7:48 AM

9/28/19 7:02 AM

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Idea Exchange: M&A Review Although the underlying economic landscape may be less favorable than it was in 2018, counteracting and equally influential factors do exist. There is an increasing number of buyers who have what seems to be endless supplies of capital to deploy. The average age of insurance agency owners continues to increase, and most do not have viable plans to perpetuate their agencies internally. Balancing all these factors, it is likely that deal activity will

remain strong through calendar year 2019 and we may match, if not exceed, 2018â&#x20AC;&#x2122;s unprecedented deal activity. Ambrosia is vice president for Marsh, Berry & Co. Inc. He is responsible for performing financial analysis, agency valuations, compensation consulting, perpetuation planning, buy and sell-side merger and acquisition, and due diligence projects. Securities offered through MarshBerry Capital Inc., Member FINRA and SIPC, and an affiliate of Marsh, Berry & Co.

October 7, 2019

Nationwide Affinity Insurance Company of America One West Nationwide Blvd Columbus, OH 43215-2220

Nationwide Insurance Company of America One West Nationwide Blvd Columbus, OH 43215-2220

The above company has made application to the Division of Insurance to amend their Foreign Company License to transact Property and Casuality Insurance in the Commonwealth of Massachusetts. Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has requested is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 02118-6200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

October 7, 2019

Nationwide General Insurance Company One West Nationwide Blvd Columbus, OH 43215-2220

Nationwide Mutual Insurance Company One West Nationwide Blvd Columbus, OH 43215-2220

The above company has made application to the Division of Insurance to amend their Foreign Company License to transact Property and Casuality Insurance in the Commonwealth of Massachusetts.

Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has requested is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 02118-6200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

INSURANCEJOURNAL.COM

October 7, 2019 Nationwide Assurance Company One West Nationwide Blvd Columbus, OH 43215-2220 The above company has made application to the Division of Insurance to amend their Foreign Company License to transact Property and Casuality Insurance in the Commonwealth of Massachusetts. Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has requested is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 02118-6200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

Advertisers Index Abram Interstate www.abraminterstate.com W2 Access Home Insurance www.accesshomeinsurance.com SC5; S5 AllState Insurance Company www.allstateagent.com 9 Amerisafe www.amerisafe.com SC4; S4 Applied Underwriters www.auw.com 2, 3, 52 Brecht & Associates www.brechtassoc.com SC2 California Earthquake Authority mvp.earthquakeauthority.com W5 City of Hope www.cityofhope.org 47 Encova Insurance www.encova.com S3; M1 Insurance Associates of America www.iaanetwork.com 39 Liberty Mutual www.libertymutualgroup.com/business 11 Louisiana Commerce & Trade Assoc. www.lctacomp.com SC5; SC6 M.J. Hall & Company www.mjhallandcompany.com W7 Monarch E&S Insurance Services www.monarchexcess.com W1 Omaha National Underwriters www.omahanational.com W1 Pacific Gateway Insurance Services www.pgiainsurance.com W9 Philadelphia Insurance Companies www.phly.com 7 PSIC - Pacific Specialty Insurance Co. www.pacificspecialty.com W11 Safety National www.safetynational.com 17 Smart Choice Agents Program www.smartchoiceagents.com 21 State Compensation Insurance Fund www.statefundca.com W3 Summit www.summitholdings.com SC1; S1 Texas Mutual www.texasmutual.com SC3 The Hartford Insurance Group www.thehartford.com 5 United Fire Group www.ufgsolutions.com 51 Worldwide Facilities www.wwfi.com 15

OCTOBER 7, 2019 INSURANCE JOURNAL | 49

Closing Quote Is Your Website ADA Compliant?

By Mark Robinson

‘Statistics suggest that the number of lawsuits over inaccessible websites filed in federal courts has nearly tripled over the past couple of years.’

here’s trouble facing businesses nationwide, including those in the insurance space, coming in the form of lawsuits on behalf of visually impaired individuals against the owners and operators of websites not optimized for screen-reader technology. No industry seems to be immune from the wave of complaints and demand letters from plaintiffs’ attorneys claiming violations of the Americans with Disabilities Act, a federal law requiring that public places – this includes hotels, restaurants, shops and, yes, insurance-related establishments – be accessible to people with disabilities. In the past, ADA disputes often involved a business’s failure to provide a wheelchair ramp or handrails. But in today’s digital world, with online transactions a critical cog in the wheel of commerce, the scope of ADA litigation has grown to include website-access lawsuits. Whether actual or threatened, these ADA claims have become all

50 | INSURANCE JOURNAL | OCTOBER 7, 2019

too prevalent. I see them more and more in my own practice, representing insurance producers being singled out by opportunistic legal counsel. And my experience is certainly not an anomaly. Statistics suggest the number of lawsuits over inaccessible websites filed in federal courts has nearly tripled over the past couple of years. In view of this surge in claims, companies within the insurance sector need to know the prevailing judicial view. The ADA and some state laws, such as California’s Unruh Civil Rights Act, require them to make their websites accessible to visually impaired customers. To that end, websites must be coded to allow words to be converted to audio translations by way of screen-reading software. An even newer trend in ADA cases requires video to be understood by visually impaired individuals by way of adequate written descriptions of voiced content. Likewise, keyboard commands must be available so those unable to handle a mouse can use a website’s interactive functions. Domino’s, the leading pizza chain, has petitioned the U.S. Supreme Court to rule on the topic, arguing these website-access lawsuits are a nuisance and the federal government has yet to disseminate rules governing how to make web platforms ADA compliant. The high court will decide whether to hear the case, Domino’s Pizza v. Guillermo Robles, this fall. In the meantime, it’s important to understand failure to abide by the ADA can be quite costly. An insurance carrier or

producer violating ADA regulations – or state laws – may be subject to compensatory, statutory and punitive damages and fines, not to mention the high price of litigation. Given that the U.S. is home to more than eight million visually impaired or blind people, sight-related ADA claims may serve a legitimate purpose. Nevertheless, unscrupulous plaintiffs and lawyers have been known to take advantage of the law to squeeze companies for lucrative settlements. Unfortunately for some, website-access lawsuits are about gaming the system for profit. Insurance-related businesses are encouraged to take steps to ensure ADA compliance with the standard Web Content Accessibility Guidelines (WCAG) 2.1 (Google it). In the absence of relevant governmental rules and procedures, WCAG aims to provide a single shared standard for web content accessibility that meets the needs of individuals, (including the disabled) organizations and governments. The news isn’t entirely bleak. Tools are available to check websites for legal incompatibilities. For companies in the insurance space not in compliance, the cost to implement necessary fixes doesn’t have to break the bank, though the expense will vary depending upon website complexity. Robinson is founding partner of Michelman & Robinson LLP, a national law firm headquartered in Los Angeles. He is an insurance industry specialist, who primarily represents retail brokers and agents, and a recognized authority on regulatory issues. Phone: 310-2995500. Email: mrobinson@mrllp.com. INSURANCEJOURNAL.COM

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